Japan

The Japanese government plans to put a state-backed turnaround body in charge of the overhaul of Japan Airlines, the Nikkei business daily said, underlining the government's deeper involvement in the process. Liabilities at JAL would exceed its assets by as much as $8.8 billion if it were liquidated, a source close to the matter has said, indicating the depth of the problem facing the airline as it seeks aid from banks and the state to avoid bankruptcy.

Liabilities at Japan Airlines Corp would exceed its assets by as much as $8.8 billion if Asia's largest airline by revenues were liquidated, a source with direct knowledge of the matter said on Friday, Reuters reported. The estimate of JAL's negative net worth, calculated by a government-led task force in charge of its restructuring, underscores the depth of the problems facing the airline as it seeks aid from banks and the state to avoid bankruptcy.

Russia's AvtoVAZ could face bankruptcy if it is unable to reach a debt restructuring deal with its banks, despite support from its 25 percent stakeholder Renault, Reuters reported. Speaking during a presentation at AvtoVAZ headquarters in Togliatti, a company official said the future of the Lada-maker remained on the line and said the company has 22,000 extra staff on its payroll that are not anticipated to have any work before 2012.

Canadian provinces, seeking more than C$80 billion ($76 billion) from tobacco companies for treatment of smoking-related illnesses, are attempting to improperly use the bankruptcy process to force Japan Tobacco Inc.’s JTI-MacDonald unit to settle, a company lawyer said. JTI-MacDonald, the maker of Export A cigarettes in Canada, filed for bankruptcy protection in 2004, after a Quebec judge ordered the company to pay C$1.4 billion that the province claims it lost in taxes when tobacco companies exported cigarettes to the U.S.

Shares in Japan Airlines rallied sharply on Monday after it emerged that the government would push for quick adoption of a recovery plan for the ailing carrier, the Financial Times reported. JAL’s shares jumped 12 per cent on the Tokyo Stock Exchange to close at Y113. That was still less than half the price they fetched a year ago, however, and significantly below their value at the start of last week, before a flurry of selling drove them to historic lows.

Japan's top financial-services regulator is preparing to further shake up banking standards, continuing efforts that already have roiled markets and put big business on tenterhooks only a month into his new job, The Wall Street Journal reported. Shizuka Kamei, Japan's Financial Services Minister, vowed in an interview on Monday to ease capital rules for lenders to small businesses and to put pressure on big companies that set tough terms with smaller suppliers.

Shares of struggling carrier Japan Airlines Corp. slid to a new all-time low Friday as investors spooked by the state of its balance sheet shrugged aside assurances from Japan's transport minister that a long-awaited, multi-billion dollar restructuring plan backed by the government is coming together smoothly, Dow Jones reported. JAL's plight comes after the company slumped to its largest-ever quarterly net loss of Y99 billion in the April-June quarter, from a Y3.41 billion net loss in the same period a year earlier.

Japanese corporate bankruptcies fell at the fastest pace in more than four years in September, signaling that an easing credit crunch is enabling smaller firms to stay in business, Bloomberg reported. Business failures dropped 18 percent from a year earlier to 1,155 cases, Tokyo Shoko Research Ltd. said in Tokyo today. It was the biggest decline since April 2005, when they fell 23.5 percent.

Can Japan’s new leaders persuade their fellow citizens to stop hoarding money and thus ease one of the biggest structural problems plaguing the world’s second-largest economy? Democratic party policymakers fresh from their historic general election victory over Japan’s long-ruling Liberal Democrats say they are determined to achieve an economic rebalancing that has eluded governments since the 1980s.

In the most profound financial change in recent Middle East history, Gulf Arabs are planning – along with China, Russia, Japan and France – to end dollar dealings for oil, moving instead to a basket of currencies including the Japanese yen and Chinese yuan, the euro, gold and a new, unified currency planned for nations in the Gulf Co-operation Council, including Saudi Arabia, Abu Dhabi, Kuwait and Qatar, BusinessWeek reported.