Laox president Koichi Taniguchi told Reuters in a recent interview that he expected sales of

personal computers to recover in the latter half of this year, helped by Microsoft Corp's newly released Windows 98 software and income tax cuts.The Japanese version of Windows 98, the latest version of Microsoft's ubiquitous operating system, went on sale in Japan on Saturday. In the United States, Windows 98 has sold more than one million upgrade units since its June 25 launch, Microsoft has said.

Laox operates a network of consumer electronics products stores. The company has 102 outlets in the Tokyo area.

Since personal computers make up 60 per cent of its total sales, Laox was hard-hit by the downturn in the computer industry in Japan since last year, Taniguchi said. ``But now, there is a possibility that the effects of Windows98 sales will help us through the year,'' said Taniguchi, adding that government measures to stimulate the economy would also be positive.The government in April announced special, one-off income tax cuts worth a total of two trillion yen. The tax cuts will take effect in August.

``The August tax cuts right after the debut of Windows 98 come at a perfect time. While the new software may not cause as much fever as Windows 95, there should be a quiet rise in sales now,'' Taniguchi said. Home electronics sales in Japan have hit bottom and are heading toward recovery, Taniguchi said.

``Audio-visual sales are rising,'' he said, adding that at one point this year sales of television sets rose 20 per cent year-on-year, due largely to the World Cup soccer tournament in France.

Taniguchi said Laox expected to achieve its earnings targets for next year.In May, Laox forecast its parent current profit for 1998-99 would be largely flat from a year earlier at 3.7 billion yen, with sales likely to total 162 billionyen against the previous year's 141.7 billion yen.

Taniguchi said the home electronics market could expand through the merging of audio-visual technology with that of personal computers, and the start of digital broadcasting.

``We are hoping to attain annual sales of 200 billion yen in the business year to March 2001,'' Taniguchi said, adding Laox also wanted to trim costs. He said Laox expected to launch more large-scale stores in the future, while closing some small ones.