Wal-Mart has pledged its commitment to staying in Japan, despite its Japanese subsidiary reporting a five-fold increase in losses.
Seiyu, the US giant's Japanese unit, made a 54bn yen ($465m; £246m) net loss in the first six months of 2006.
Hit by a one-time write-off and ongoing cost-cutting work, this compares with a 10.6bn yen loss a year earlier.
Wal-Mart announced earlier this year that it was pulling out of both Germany and South Korea due to poor results.
Difficult market
Wal-Mart's Seiyu chief executive Ed Kolodzieski said the Japanese unit was now turning itself around.
Despite overall half-year sales falling 2.9% to 468bn yen, he pointed to underlying like-for-like sales rising 1.4%, the first year-on-year gain in 14 years.
Mr Kolodzieski added that Seiyu was continuing to close under-performing stores while opening new outlets.
He now hopes the firm will return to profitability in 2007.
Japan has proven to be a difficult market for foreign retailers.
French giant Carrefour, the world's second largest retailer to Wal-Mart's number one, pulled out of the Japanese marketplace last year.
Earlier this month Wal-Mart announced its first drop in profits for 10 years, blaming the cost of pulling out of Germany.
Its global second-quarter profits dropped to $2.08bn (£1.1bn) from $2.8bn a year earlier.
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