Japan Airlines filed for bankruptcy protection on Tuesday as it battles to overcome crippling debts, while uncertainty over US bank earnings led to a mixed day for Asian markets.
Asia's biggest carrier will receive billions of dollars in public aid to keep it flying as it undergoes a painful revamp that will see it cut about 15,600 jobs, about a third of its staff.
Management at Japan Airlines (JAL) formally began proceedings Tuesday afternoon, making it one of the highest profile victims yet of Japan's economic woes.
Soon after its filing, the Tokyo Stock Exchange said the company would be delisted from the bourse on February 20.
The firm has estimated debts of about 2.32 trillion yen (25.7 billion dollars) and, as well as cutting jobs, will also look to slash routes and sell assets.
Dealers expected the decision, which came after the stock market closed, and JAL shares hit an all-time low of three yen (three US cents) -- cutting its market value to about 90 million dollars, far less than the cost of a new jumbo jet. It finished flat at five yen.
The Nikkei ended down 0.83 percent, or 90.18 points, at 10,764.90.
Investors are expected to be left out of pocket if JAL goes bust, although Tokyo says it will stay in the skies during the restructuring, which is expected to be similar to the process used for US auto giant General Motors.
"The government has prepared various support measures," transport minister Seiji Maehara told reporters. "We want to help (JAL) to recover while operating safely," he added.
With Wall Street closed for a public holiday on Monday, markets elsewhere in the region were given little direction and dealers were looking ahead to US banks' fourth-quarter reports.
JP Morgan Chase last week announced fourth quarter net earnings quadrupled and profits doubled for the full year. But the news came in below many analysts' expectations, weighing on the stock on Friday.
"While investor sentiment started 2010 with a flourish, a mixed dose of US corporate earnings has seen risk appetite fade a little," Danica Hampton, a forex strategist at Bank of New Zealand, told Dow Jones Newswires.
Citigroup is set to announce its results later Tuesday, with Bank of America, Morgan Stanley and Wells Fargo to follow later in the week.
Sydney fell 1.02 percent, or 39.9 points, to 4,861.2.
Financials ended 1.1 percent lower, while the materials sector, including miners Rio Tinto and BHP Billiton, dropped 0.5 percent.
"The market opened the session slightly higher but by mid-morning, the financials had begun to lead the sell-off," said IG Markets analyst Ben Potter.
Seoul closed flat, with the index edging down 1.56 points to 1,710.22.
But Shanghai and Hong Kong rose, helped by banks and property developers due to easing concerns over monetary tightening in China, dealers said.
Hong Kong rose 1.02 percent, or 217.97 points, to 21,677.98.
And the Shanghai Composite Index, which covers both A and B shares, was up 0.30 percent, or 9.77 points, to 3,246.87.
Oil majors were also helped by a slight upturn in crude prices.
China's banking regulator said overnight it had always required banks to base lending on real economic demand and properly manage the pace and quality of lending, signalling an attempt to defuse concerns over new loan guidelines.
Oil was mixed Tuesday after suffering big losses at the end of last week and on Monday.
New York's main contract, light sweet crude for February delivery was 22 cents higher at 78.22 dollars a barrel while Brent North Sea crude for February delivery eased 10 cents to 77.00 dollars.
The dollar slipped to 90.37 yen in Tokyo afternoon trade from 90.75 late Monday in Europe, while the euro edged up to 1.4389 dollars from 1.4382 but declined to 130.03 yen from 130.52.
In Hong Kong, gold closed higher at 1,139.00-1,140.00 US dollars an ounce, from Monday's close of 1,135.00-1,136.00 dollars.
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