Japan's transport minister said Sunday he will not force the struggling Japan Airlines, Asia's biggest airline, into bankruptcy, The Associated Press reported. "We will not crush and liquidate (the airline)," Land, Infrastructure and Transport Minister Seiji Maehara said on a TV Asahi talk show.

The Japanese government was not considering bankruptcy for loss-making Japan Airlines Corp, Transport Minister Seiji Maehara said on Thursday, adding he had not yet given the airline an answer to its plea for a public bail-out, Reuters reported. The new transport minister met JAL's CEO and the airline's lenders on Thursday to discuss how to rescue the airline, which has been hit hard by the global aviation downturn in the wake of the financial crisis. Speaking after the meetings, Maehara said the biggest problem for JAL was a lack of capital.

Japan’s transportation minister sought on Thursday to allay concerns that the country’s new centre-left government might withdraw financial support for Japan Airlines, the loss-making carrier that is seeking at least Y100 billion ($1.09 billion) in emergency aid, the Financial Times reported. Seiji Maehara, who assumed the transportation post on Wednesday, said: “Japan’s skies have always had two airlines, and it’s important that we continue with a system of two major airlines.

Japan Airlines Corp., the recipient of three government bailouts since 2001, will find out soon if the rules have changed, Bloomberg reported. The Democratic Party of Japan, which takes power Sept. 16, pledged to cut what incoming Prime Minister Yukio Hatoyama called “wasteful” government spending. Japan Air, with 235 billion yen ($2.6 billion) in loans from a state-owned bank, likely will seek more aid after it submits a mid-term business plan by Sept. 30, according to analysts.

Japanese corporate bankruptcies fell for the first time in three months in August as companies found it easier to borrow and government spending fueled demand, Bloomberg reported. Business failures declined 1 percent from a year earlier to 1,241 cases, Tokyo Shoko Research Ltd. said in Tokyo today. Efforts by the Bank of Japan and the government to encourage lending helped businesses stay afloat in the wake of the country’s deepest postwar recession. Companies have also benefited from more than $2 trillion in worldwide government stimulus that encouraged consumers to buy cars and electronics.

The World Trade Organisation is expected to rule on Friday that billions of dollars in European government subsidies for Airbus aircraft are illegal, the Financial Times reported. That would hand victory to the US and Boeing, in the first round of a WTO dogfight between the world’s biggest aircraft manufacturers. The preliminary ruling, is likely to spur Washington to launch a WTO challenge to further government loans for Airbus to develop its new €11 billion ($16 billion, £10 billion) A350 extra wide-bodied airliner which will compete with Boeing’s long-delayed 787 Dreamliner.

Japan is on the verge of a reluctant revolution, The Wall Street Journal reported. On Sunday, voters here are poised to remove the country's ruling party from power after 54 years of nearly continuous rule. Polls show voters in Sunday's election heavily favor the Democratic Party of Japan, an 11-year-old collection of market reformers, union leaders and consumer activists that has never held full political power.

World stock markets have fallen despite Japan becoming the latest country to officially come out of recession, the BBC reported. Analysts say that investors are worried that they may have been too quick to predict an economic rebound during recent rallies. Leading Wall Street markets fell about 2% lower after similar losses in the UK, mainland Europe and bigger drops in Asian markets. "There is now a realisation that coming out of a recession is one thing, but building a recovery is another," said Justin Urquhart Stewart, director at Seven Investment Management.

As central bankers keep pumping huge sums into the global financial system, they are also pumping up one of the riskier investment strategies in the currency market, The Wall Street Journal reported. Known as the "carry trade," the strategy involves borrowing money in countries such as Japan where interest rates are low, then investing it where rates are higher and pocketing the difference. After flourishing during the boom years, the trade all but disappeared as big currency swings led to heavy losses amid the financial crisis.

Japanese producer-distributor Movie-Eye Entertainment, distributor of Oscar-winners Crash and Million Dollar Baby, has filed for bankruptcy according to a fax sent to creditors yesterday. Movie-Eye increased spend on film in anticipation of becoming a listed company last year but the global financial crisis, Japanese recession and underperforming box office led to losses of $45 million (Y4.29 billion) over the period.