Japan

Willcom Inc. will file for bankruptcy protection with the Tokyo District Court on Thursday, initiating a pre-negotiated rebuilding process that will tap taxpayer money, the Nikkei business daily said. The personal handyphone system (PHS) service provider's rehabilitation efforts will be sponsored by Softbank Corp and investment fund Advantage Partners LLP, the paper said.

Japan Airlines Corp. won U.S. court protection while it reorganizes through its main bankruptcy case in Tokyo, BusinessWeek reported on a Bloomberg story. U.S. Bankruptcy Judge James Peck in Manhattan today granted the Tokyo-based airline Chapter 15 protection in Manhattan court, giving Japan Air a shield against U.S. lawsuits and helping it to organize U.S. creditors’ claims. In operation since 1951, Japan Airlines is the largest domestic carrier in Japan and filed the country’s fourth-biggest bankruptcy. The company’s Jan.

Japan Airlines Corp plans to cut employee pay by 5 percent from April and eliminate bonuses in fiscal 2010 in an attempt to swiftly turn around its business, the Nikkei business daily reported. The proposed wage cuts are the first detailed restructuring plans to come out of JAL since the company filed for bankruptcy in January and was placed under the oversight of the state-backed Enterprise Turnaround Initiative Corp. of Japan, the daily reported.

JAL, Asia's largest carrier by revenue, which filed for bankruptcy protection to pursue turnaround efforts under the auspices of the ETIC, needs around 600 billion yen in bridge loans, the Nikkei said. The business daily said the Development Bank of Japan is expected to extend a total of 300 billion yen in bridge loans, up from the initial estimate of 200 billion yen. The remaining 355 billion yen will be provided by the ETIC.

Group of Seven financial leaders agreed on the need to continue supporting their economies until financial recovery takes a firmer hold, but they have yet to reach a consensus on how to overhaul regulation of their financial sectors, The Wall Street Journal reported. French Finance Minister Christine Lagarde said leaders were unable to make collective decisions on a U.S. proposal to limit proprietary trading at commercial banks, partly because financial institutions in countries including France, Germany and Japan aren't plagued by the same issues as U.S. banks.

The decline and fall of Japan Airlines, once Asia's largest carrier, which was put under bankruptcy protection on Jan. 19, is a tale of intellectual, political and financial corruption on an almost unimaginable scale, The Vancouver Sun reported. It is also an illustration of the massive task facing the new Democratic Party of Japan (DPJ) government of Prime Minister Yukio Hatoyama if it genuinely intends to try to dismantle the institutionally entrenched wrongheadedness that has overtaken Japan during more than 50 years of rule by the Liberal Democratic Party (LDP).

A leading credit rating agency threatened Tuesday to downgrade Japan’s rating unless the world’s second-largest economy took more steps to rein in its mounting public debt, The New York Times reported. The warning by Standard & Poor’s, which cut its outlook for Japan’s sovereign rating for the first time since 2002, reflected concerns that the government’s efforts to trim its mounting public debt were proceeding too slowly. The Japanese economy has emerged from its worst recession since World War II, but is still reeling.

Bank of Japan policy makers are prepared to consider expanding an emergency-loan program for banks and increasing purchases of government debt should the recovery falter, people with knowledge of the matter said, Bloomberg reported. The central bank’s board will leave interest rates and its lending program unchanged tomorrow, 16 of 17 economists said in a Bloomberg News survey.

All Nippon Airways Co. sees the bankruptcy of Japan Airlines Corp. as an opportunity to grow its international business significantly and emerge even stronger than its larger rival, a top executive said in an interview with The Wall Street Journal Friday. "We need to get stronger when they are sick," said Keisuke Okada, an ANA board member and executive vice president of alliances and international affairs.

A pillar of Japan Inc. founded in 1951 to help the country rise from the ashes of World War II, Asia's largest airline by revenue sought court protection from creditors on Tuesday to grapple with a debt load of $25 billion, a level well above its cash flow, The Wall Street Journal reporeted. Japan's new government played a big role in steering the company toward bankruptcy protection and portrayed the moves—despite the new subsidies—as an early sign of how economic policy making is changing since the long-ruling Liberal Democratic Party lost power four months ago.