Japan

Three Japanese auto makers slashed their earnings and production plans Friday on the back of prolonged weakness in demand, with Honda Motor Co. implementing another cutback in domestic output for this fiscal year, The Wall Street Journal reported. Due to the continued slump in auto sales, Honda said that it will reduce production in Japan for the current fiscal year through March by 56,000 vehicles. The latest cutback follows a domestic output reduction by a combined 86,000 vehicles that it already announced for the second half through March.

Japan’s corporate bankruptcies rose the most in eight years in 2008 as a deepening recession weakened sales and made it harder for businesses to get funds, Bloomberg reported. Bankruptcies climbed 11 percent from a year earlier to 15,646 cases last year, the fastest pace since 2000, Tokyo Shoko Research Ltd. said in Tokyo today. A total of 33 publicly traded companies went out of business in 2008, the most in the postwar period, the report said. Japanese companies have struggled to find investors willing to purchase their debt since the collapse of Lehman Brothers Holdings Inc. in September.

According to a recent study conducted by Asian Banker Research, Malaysia is listed fourth in the Asia Pacific region's most creditor-friendly bankruptcy regimes where creditors can expect to recover more than 80 cents in the dollar of assets they are owed, the Malaysian national news agency reported. The findings of the study released today said Singapore and Japan were Asia Pacific region's most creditor-friendly bankruptcy regimes where creditors could expect to recover more than 90 cents in the dollar. Taiwan came third with a similar rate of recovery with Malaysia.

Corporate earnings will continue to slump into the first half of 2009 amid the first simultaneous recessions in the U.S., Japan and Europe since World War II, Bloomberg reported on analyst estimates. While profits will rise 4.3 percent for the full year in the U.S., earnings in Europe are projected to decline for all of 2009 and analysts predict worsening reports out of Asia because the recession hasn’t fully hit there yet. Earnings at European oil companies may drop 21 percent in 2009, compared with a 4.7 percent gain last year, according to estimates.

Export-reliant Asian economies showed more signs of weakness on Friday, with Japan's industrial output diving at a record pace and South Korea warning it faces an "unprecedented crisis" as global demand wilts, Reuters reported. Even the once unstoppable Chinese economy is feeling the strain, with companies recording a sharp slowdown in profit growth in the first 11 months of the year. On top of Japan's steep fall in industrial output in November, core consumer inflation fell faster than forecast last month, putting the shrinking economy on course for a spell of deflation next year.

Toyota Motor Corp. said Monday it expects to post its first-ever operating loss in the fiscal year through March 2009 and barely eke out a net profit, showing how severely the global economic downturn is hitting even the world's most competitive companies, The Wall Street Journal reported. Japan's biggest company by market cap said it expects consolidated operating loss of ¥150 billion, or about $1.68 billion, in the fiscal year through March 31, 2009, hurt by sliding demand in the U.S., Europe and Japan and the rising yen against the dollar.

Urban Corp., the developer that filed Japan’s biggest bankruptcy this year, may be sold separately after failing to attract final bids due today from investors, two people familiar with the situation said, Bloomberg reported. Daiwa House Industry Co., Japan’s biggest home builder, Goldman Sachs Group Inc.

Taiyo Kogyo Co., a Japanese plastic product wholesaler, filed for bankruptcy protection today with the Tokyo District Court after accumulating 14.8 billion yen ($157 million) of liabilities, Bloomberg reported today. The company made the announcement today in a filing to the Tokyo Stock Exchange. The stock will be delisted from the Jasdaq exchange on Dec. 9. Read more.

In its latest effort to prevent Japan's economy from sinking further into recession, the Bank of Japan expanded its lending programs to ensure sufficient funds are available for companies ahead of the key year-end season, The Wall Street Journal reported today. The steps, announced after an unscheduled meeting of the BOJ's seven-member policy board, came as Japanese banks and companies are beginning to find it harder and more expensive to raise money in the financial markets.

The troubled German regional bank BayernLB said on Monday that it would shed more than a quarter of its workforce by 2013, with Asian operations slated to bear the brunt of a rigourous downsizing, Agence France-Presse reported today. A statement said BayernLB would eliminate 5,600 posts of a total 19,200 in a bid to save 670 million euros ($850 million) over the next five years. BayernLB “will be smaller and engaged in fewer activities, but it will emerge stronger, closer to its customers and less susceptible to incalculable risk," chairman Michael Kemmer was quoted as saying.