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.

Japan Airlines Corp, the debt-ridden group undergoing a state-backed rehabilitation process, will cut its workforce by 19,133 by the end of March 2015, the Kyodo news agency reported, citing a final draft of JAL's rehabilitation plan. The draft said JAL will expand its previously announced retirement program and shed 8,339 jobs through fiscal 2014 ending March 2015, the Japanese news agency said. JAL's earlier plan was to cut about 16,000 jobs during the current fiscal year started April, the news agency said.

Investors are understandably scared of the sovereign debt crisis unfolding in Europe. Amid their angst, however, they are ignoring a more likely, and significantly larger, debt catastrophe that is about to hit the nation with the second-largest economy in the world — Japan. Two decades of stimulative, low-interest-rate fiscal policy have made Japan the most indebted nation in the developed world, and as new Prime Minister Naoto Kan recently said, in his first address to Parliament, that situation is not sustainable, Seeking Alpha reported.

Debt-ridden Japan Airlines Corp and the state-backed turnaround body overseeing its rehabilitation said the firm's capital plans, including negotiations for new financing, will be not be finalized until September or later, the Nikkei business daily reported. JAL and the Enterprise Turnaround Initiative Corp of Japan (ETIC) said they will be able to submit a rehabilitation plan to the Tokyo District Court by the end of August, as scheduled, the paper reported.

Debt-ridden Japan Airlines Corp and the state-backed turnaround body overseeing its restructuring have sought lender approval to waive off more than 521.6 billion yen ($6 billion) that JAL owes, the Nikkei business daily reported. Of the 521.6 billion yen for which approval is being sought, the company has 383 billion yen in loans and the rest in corporate bond and derivatives, the paper said. As part of the restructuring plan, the Enterprise Turnaround Initiative Corp of Japan has asked the Development Bank of Japan to write off 142.1 billion yen of JAL debt on its books, Nikkei reported.

Japan Airlines Corp said it will offer early retirement packages to pilots, co-pilots and trainees from Tuesday until Aug. 16, the Nikkei business daily reported. The debt-ridden group has set a goal of shedding 16,000, or one-third, of its employees in the current year ending March 2011. The first round of early retirement offers found 4,003 takers, the paper said. The group is looking to shed about 670 people from subsidiary Japan Airlines International Co, which has 1,450 pilots, 1,030 first officers and 300 trainee pilots on its payroll, the Nikkei said.