Japan Brokerage Firm Yamaichi Securities Closes Its Doors With $24 Billion in Debt, Becoming Biggest Japan Company To Collapse Since WWIIBy CHESTER DAWSON

TOKYO (AP) _ Ending a century as one of Japan's largest brokerage houses and signaling a new era for the country's financial industry, Yamaichi Securities closed its doors today amid a rising tide of red ink and a slump in Tokyo stock prices.

Yamaichi, once the nation's top-ranked broker and still a key underwriter for much of corporate Japan, is the biggest Japanese company to fold since World War II. It leaves behind about $24 billion in liabilities.

``It breaks my heart that the situation has turned out like this,'' Yamaichi President Shohei Nozawa said while choking back tears in a news conference at the Tokyo Stock Exchange.

The failure is the latest in a recent string of financial shipwrecks in a Japan beset with a myriad of economic troubles, from sluggish growth and debt-laden banks to a volatile stock market.

The end of Yamaichi (pronounced YAH-mah-ee'-chee) shows the government is more willing to let weak companies fall in a drive to bolster the economy and reform the financial system, and could signal other financial companies to get their houses in order or face the same fate.

Many Japanese expect more brokerages to fail.

``It won't be the last company to go under,'' said Yoichi Yagi, 35, a white-collar worker strolling with his wife and baby in Tokyo's central Ginza district this afternoon.

Japanese financial authorities were quick to pledge emergency financing to cover the brokerage's assets and appealed for calm on markets in Japan and aboard.

``I strongly hope investors as well as customers will act calmly,'' Finance Minister Hiroshi Mitsuzuka told reporters today. ``We will take all available steps to maintain the stability of the financial system.''

Bank of Japan Governor Yasuo Matsushita said the central bank would provide special loans to fund account cancellations via Yamaichi's parent bank, Fuji Bank Ltd.

Both officials said Yamaichi Securities will be able to make good on all of its debts because the company's assets exceed its liabilities.

Yamaichi, with about 82,000 shareholders, leaves behind an uncertain future for its 7,500 employees, including 211 in the United States.

Yamaichi is the third Japanese financial company to fail in less than a month. Sanyo Securities, a medium-sized brokerage, went bankrupt Nov. 3 after failing to repay mounting debts. The collapse of Hokkaido Takushoku, Japan's 11th-largest commercial bank, followed a week ago.

Yamaichi faced collapse once before in 1965, but was pulled back from the brink by a government-orchestrated effort to preserve Japan's ``convoy system'' in which stronger companies aid weaker companies to keep them afloat.

Japan's new willingness to let Yamaichi Securities and the other two other big financial companies go under comes as the government prepares to implement its so-called Big Bang package of financial reforms.

The changes involve scrapping regulations over the next four years that have fostered cozy ties between banks, brokers and insurance companies. The move is designed to increase the competitiveness of Japan's financial institutions.

While Yamaichi Securities' financial woes were no secret _ the company posted a half-year loss of $63 million last month _ the Finance Ministry revealed the extent of its problems were more serious than previously reported.

Most glaringly, Finance Minister Mitsuzuka said today that Yamaichi informed his ministry just one week ago that it had off-the-book debts totaling $2.06 billion.

Mitsuzuka said the ministry will look into news reports some of those debts resulted from an illegal practice known as ``tobashi'' in which favored clients are protected from investment losses.

Growing concern over Yamaichi's finances was reflected in the recent drop in the company's share price. Moody's Investors Service and Standard and Poor's helped seal Yamaichi's fate when the credit agencies downgraded their ratings of its debt to junk-bond status last week.

The rut that Japanese financial institutions are in today dates to the rupture of a speculative land and stock price bubble in 1989. The economy has yet to fully recover from a slump triggered by a plunge in the Japanese equity and real estate markets.

Yamaichi also suffered from the fallout of a payoff scandal that broke earlier this year. The company's former president and five other executives are among a number of brokerage industry officials who have been arrested.

The impact on financial markets was uncertain because they were closed today for a national holiday.

But turmoil in the markets is not an everyday concern in Japan, where big companies do most of the investing and ordinary people keep their savings in banks or postal accounts.

``Japanese don't get so worried about these things,'' said Hiro Matsuda, 63, advisor to a utility pole company. ``People are smart enough not to put so much of their money in stocks.''