Consumer loan company Takefuji Corp. has decided to file for bankruptcy in the face of mounting claims by borrowers for reimbursement of excessive interest charges and thinning profit margins under tightened consumer loan regulations, sources said Monday, The Japan Times reported. Takefuji President Akira Kiyokawa denied media reports that it would seek court protection from creditors, telling reporters at his home in Yokohama that no decision had been made.

Japan’s ruling Democratic party plans to introduce a supplementary budget of up to $55bn to pay for further stimulus measures aimed at combating the impact of the strong yen and kick-starting the flagging economy, the Financial Times reported. The move highlights growing concerns that the Japanese economy is stagnating in the face of weakness in export markets and a strong yen and that more needs to be done in spite of the government’s September 15 currency market intervention.

Takefuji Corp. shares are poised to drop by their daily limit after a report Japan’s third-biggest consumer lender was preparing to seek bankruptcy protection in what would be the country’s second-biggest filing this year, Bloomberg reported. Takefuji, with 430 billion yen ($5.1 billion) in liabilities as of June 30, is in final talks to file for bankruptcy at the Tokyo District Court, the Nikkei newspaper said, without saying where it obtained the information.

NIS Group Co. fell as much as 39 percent in Tokyo after the Japanese consumer and business lender said its liabilities may exceed assets after Incubator Bank of Japan Ltd. went bankrupt, Bloomberg reported. NIS has 9,720 shares in Incubator Bank, which declared bankruptcy last week, NIS said in a statement on Sept. 10. NIS also has 6.7 billion yen ($79 million) of debt in Incubator Bank. NIS fell 33 percent to 12 yen at 9:19 a.m. in Tokyo, after earlier declining 39 percent to 11 yen.

The Japanese government Friday announced a Y915 billion stimulus package aimed at helping the export-driven economy deal with domestic deflation, a surging yen and a slowdown in overseas markets, Dow Jones reported. The plan, which draws on existing funding to avoid the need for yet more debt, has already been dismissed by economists as too small to have much impact given the scope of Japan's economic malaise. The wide-ranging program includes incentives and regulatory reforms to prop up employment, consumer spending and corporate investment at home.

The Incubator Bank of Japan, a small, unlisted lender that specialises in small business loans, was expected to file for bankruptcy protection on Friday, Japan's financial regulator said, Reuters reported. Depositors will be protected for up to 10 million yen ($119,200) in principal, the regulator said. The Bank of Japan said it expected no adverse impact on the country's banking system from the small lender's failure and financial markets took the news in stride.

Lehman Brothers Holdings' Japanese subsidiary is one of the first major units to get going with its liquidation process, after it got court approval for its debt repayment plans, the Nikkei business daily reported. Lehman Brothers Japan Inc got approval for liquidation from the Tokyo district court and secured support for the plans from a majority of its creditors on Wednesday, and is expected to start repaying its debt by late November, the paper reported.

Seven months after Japan Airlines Corp. filed the country's biggest nonfinancial bankruptcy petition, the carrier unveiled a restructuring plan that accelerates a big reduction in its work force and cuts unprofitable routes more deeply than expected, The Wall Street Journal reported. The carrier plans to refinance its roughly 300 billion yen, or about $3.5 billion, in debt by the end of March, according to a person familiar with the matter, ensuring months of protracted negotiations with its main lenders in the coming months.

Japanese Prime Minister Naoto Kan on Monday approved a rehabilitation program for Japan Airlines which is undergoing a state-backed restructuring, Dow Jones Daily Bankruptcy Review reported on an Agence France-Presse story. Transport Minister Seiji Maehara informed Kan about the program a day before the struggling carrier submits it to the Tokyo District Court, government officials said. Maehara told reporters that Kan agreed to the program, but he stopped short of revealing details.

Worried by a sharp slowdown in the economy and a strong yen, Japan's government is considering another round of stimulus to stoke growth as measures enacted during the recent financial crisis begin to expire, The Wall Street Journal reported. But policy makers face a daunting challenge balancing any new spending with their pledges to curb the country's debt, which is already approaching twice the size of Japan's gross domestic product.