IN JAPAN: YAMAICHI'S UNRAVELING MAY SHOW HIDDEN LOSSES.

Byline: Stephanie Strom The New York Times

The collapse of the Yamaichi Securities Co. was not a particular shock in Japan, where predictions had been building for months that the nation's oldest brokerage firm, saddled by debts and mismanagement, would go out of business.

The nasty surprise, however, came in the disclosure during the firm's final days that Yamaichi had hidden $2.06 billion in losses, much of it amassed under a practice outlawed six years ago. Moreover, the government expressed a remarkable passivity over whether more such losses were lurking in a financial system already under enormous strain.

Finance Minister Hiroshi Mitsuzuka acknowledged on Monday that he did not know how many other securities firms might be hiding similar losses.

Worries that more such hidden losses would emerge were underscored Monday in the global stock market reaction to the downfall of Yamaichi, Japan's fourth-largest brokerage firm and the third big Japanese financial institution to fail in less than a month. Japanese markets were closed for a holiday on Monday, but markets fell sharply in Europe and in the United States. In early trading today, Japan's main stock index fell 4.7 percent.