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Tuesday, November 25, 1997 Published at 09:24 GMT


Yamaichi customers dash for cash
image: [ Customers panic to get their savings back ]
Customers panic to get their savings back

Long queues formed on Tuesday outside Yamaichi offices as customers tried to salvage their savings after Japan's biggest corporate failure.

The brokerage house, which announced on Monday that it would have to wind down its operations after being overwhelmed by bad debt, re-opened for business but offered only limited services.

Prepared for a barrage of transaction cancellations by customers, the company arranged for extra staff and funds to be on hand at its 116 branches.

The government has guaranteed that no-one will lose their money but clients of Yamaichi Securities were not risking their chances.

" I don't know what to do. Both the banks and security firms are in trouble," said one of Yamaichi's customers.

Stocks and bonds entrusted to the firm are now being returned to clients and transaction cancellations are being accepted. Following an order from the finance ministry, new transactions are suspended.

The general feeling in Japan is: if Yamaichi cannot survive, everybody else could be hit as well.

When Tokyo's stock market opened on Tuesday morning for first time since Yamaichi's collapse, there were fears that shares would go into a free-fall. But after a dramatic dive, share prices stabilised.

However, confidence in the economy still seems a distant memory. Millions of Japanese have invested their life savings in the stock market - and for weeks now they have seen their shares lurch terrifyingly up and down. The market value of Japanese stocks is still 50% lower than during its record levels eight years ago.

"I think the market will fall further and that other companies are bound to go bust," said one worried investor.

The fear that now hangs over Japan is that the malpractice and mismanagement at Yamaichi may yet be discovered in other banks and security houses.

Many Japanese believe confidence can only be restored by a government pledge to guarantee every bank deposit.

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