Japan

Japan's factories boosted their output in July by a greater margin than expected, delivering a shot in the arm to Japanese shares.

Resona Holdings Inc. decided on Tuesday (26 August) to reduce the number of its subsidiaries and affiliates to one-fourth the current level, said president Eiji Hosoya.

The number of corporate bankruptcies in Japan plunged 23.7 per cent in July compared to the same month a year ago, marking seven straight months of decline, a private credit research company said Thursday.

Resona Holdings Inc, the Japanese bank that received a US$16.3 billion government bailout, has hired Nomura Holdings Inc. to find buyers for Cosmo Securities Co. and three leasing businesses as it bids to cut costs, according to insiders.

When Eiji Hosoya, the new chairman of Resona, first saw the swooping R of the bank's logo, it reminded him of the badge of the old Japanese National Railways, the train operator he helped privatise in the mid-1980s.

Spurned by major banks, many of Japan's small- and medium-sized enterprises (SMEs) have to depend on credit unions for financing.

Yamaya is one of countless small- and medium-sized enterprises (SMEs) in Japan feeling the effects of a widening credit crunch.

The Bank of Japan (BoJ) is to kick-start the development of an asset-backed securities market for small businesses to give them capital-raising alternatives to Japanese banks, whose bad-debt portfolios make them reluctant to offer new loans.

In Tokyo, the US$17bn bail out of Resona bank is being hailed as a promising first step towards fixing Japan's fragile financial system.

The repercussions of Resona's partial nationalisation are likely to be felt throughout Japan's regional economies, where the bank had built its foundations.