Headlines

The Japanese government said Friday it will scrap part of the previous Cabinet's stimulus package, freeing up 2.926 trillion yen ($32.38 billion) so that it can redirect the money toward more effective projects to stimulate growth, The Wall Street Journal reported. The decision capped weeks of government efforts to save money by axing what it sees as ineffective programs in the 14 trillion yen budget, which was enacted in May by the previous Liberal Democratic Party administration to pay for most of its record 15.4 trillion yen stimulus package.

Yohji Yamamoto Inc., a fashion house famous for its austere black designer clothes, filed for bankruptcy protection on Oct. 9, a victim of slumping sales as Japanese women turn to cheaper casual outfits during a prolonged economic downturn, Northwest Asian Weekly reported on an Associated Press story. The company’s debts total six billion yen ($67 million), exceeding its assets. However, under Japan’s corporate rehabilitation law, the designer house will continue to operate at home and abroad. Founder and designer Yohji Yamamoto will continue to work.

Bankruptcy petitions in Hong Kong continued to surge in September, rising 31 percent from a year earlier, despite an improving economic environment, government data showed on Friday. Bankruptcy petitions totalled 1,142 in September, up from 873 a year earlier, and increased from August, when 1,099 petitions were filed, although monthly figures are not seasonally adjusted.

China would risk instability by letting the yuan appreciate excessively, the Asian Development Bank cautioned after the U.S. Treasury Department criticized the currency’s lack of flexibility. “We should not push hard for China to appreciate the currency too fast,” said Yolanda Fernandez Lommen, chief China economist for the ADB. “We don’t want to see China, the third largest economy in the world, unstable.

Dubai World said Thursday it is close to completing its restructuring, which will help the government-owned conglomerate save $800 million over the next three years, easing part of its debt pile, Dow Jones reported. The company, which faces looming debt obligations, including a closely watched $3.5 billion bond due later this year, said the restructuring will allow its business units to be "well prepared to thrive in both the current climate and the still uncertain future." Dubai World said it has cut its global workforce by 15% to just under 70,000, and its U.A.E.

Dutch-based DSB Bank got a one-day extension to find a buyer from a Dutch court, which said on Thursday a deal with a big Dutch bank was the only credible option for a continuation of the privately-held bank, Reuters reported. DSB collapsed on Monday after a run on the bank cost it more than €600 million ($894.2 million) in deposits in 12 days and it was placed under control of administrators. A government-led plan to rescue it via a consortium of five larger competitors failed on Sunday.

Only two years ago, Goldman Sachs Group Inc. was the financial saviour for CanWest Global Communications Corp., putting up most of the money for the Canadian company's $2.3-billion buyout of Alliance Atlantis Communications Inc., The Globe and Mail reported. But the New York investment bank has gone from being CanWest's closest partner to its biggest agitator as the company tries to restructure its debt under court protection from creditors. Though Goldman is not a creditor in the process, it has claim over the 131 specialty TV channels purchased in the Alliance Atlantis takeover.

General Motors Co. doesn't plan to place its South Korean unit GM Daewoo Auto & Technology Co. in court receivership, GM's Executive Vice President Nick Reilly said Thursday, Dow Jones reported. GM and Korea Development Bank, a main creditor bank of GM Daewoo, aren't planning to seek bankruptcy protection for GM Daewoo as they are trying to find solutions to ease the company's liquidity issues, he told reporters in Seoul.

GM Daewoo, which accounts for about a quarter of GM's global auto production, also represents one of the few remaining areas needing restructuring after the U.S. automaker exited bankruptcy in July with $50 billion in U.S. government funding. GM Chief Executive Fritz Henderson is in Seoul this week to discuss options for restructuring GM Daewoo with the South Korean government -- an increasingly important asset for the automaker.

Russia's largest carmaker Avtovaz is on the verge of bankruptcy and needs to cut almost 50,000 jobs if it is to have any hope of survival, a newspaper Thursday quoted a ministry memo as saying. The damning indictment, written by Deputy Industry Minister Andrei Dementiev to the government, also casts doubt on the cooperation with Avtovaz's 25 percent shareholder Renault, the Kommersant daily said.