But when Japan Post is privatized on Monday, the Shirogane office will become part of the world's biggest commercial bank — with assets of $3.03 trillion — in a move intended to inject competition into Japan's banking sector.

"Our customers will soon experience the merits of privatization," Yoshifumi Nishikawa, president of Japan Post, said Friday. "They will see a better quality of services, or new products — in short, more convenience."

The massive changeover is the result of 2005 reforms instituted by then-Prime Minister Junichiro Koizumi, a former post and telecommunications minister who championed the issue in his landslide victory in parliamentary elections that year.

Much more is at stake than just stamps and letter deliveries: Japan Post operates a bank with over 400 million accounts. Its 24,500 offices nationwide act as sales agents for insurance and investment products.

For millions of rural Japanese, the post office is their only bank, and the system's ubiquitousness has made it a symbol of a benevolent government ready to cater to every citizen's needs.

"The post office is such a basic necessity," said Kazuko Nishina, 36, an accounting clerk, who was withdrawing cash from her savings account at the Shirogane post office.

"I'm still not sure what's going to happen with privatization, but I hope there aren't any surprises for ordinary customers," she said.

Changing such an entrenched system has been tough. When Koizumi pushed through the reforms, critics warned privatization would reduce services, especially to the countryside.

Even lawmakers within his own ruling party vilified the reforms as another attack by modern times on an orderly, secure society.

But Koizumi argued that the government guarantee on postal savings had encouraged generations of Japanese to park their money in the low-interest accounts, creating a stagnant pool of savings and diverting funds away from more productive investments like stocks and mutual funds.

Experts have also said that postal funds have been used to finance pointless government-backed public works — bridges to nowhere, redundant roads — and to purchase government bonds, contributing to a public debt now over 160 percent of Japan's gross domestic product.

"These reforms were necessary in terms of making more efficient use of funds," formerly being diverted to useless public works projects, said Kentaro Kogi, banking analyst at Macquarie Securities.

Privatization could also help foreign banks and investment companies scoop up new clients, with the huge savings pool up for grabs at a time when more Japanese turning to stocks and mutual funds.

That means big money for both domestic and foreign banks, as well as insurance companies.

"We can expect the changes to be a plus for stock markets, against the general backdrop of a trend toward more diverse investments," Kogi said.

The entity privatized on Monday will eclipse Citigroup, with assets of $2.22 trillion, as the world's largest commercial bank. Third will be Japan's Mitsubishi UFJ Financial Group, with $1.67 trillion.

Under the 10-year privatization plan, Japan Post will on Monday be broken into four separate businesses, initially held under a government-controlled holding company: An insurance company, savings bank, mail courier and post office management company.

The companies are set to be made independent by 2017, and aim to list on stock markets. The new bank has said it hopes to improve returns on its savings by starting mortgage and credit card businesses, and lending to small companies.

Still, uncertainties remain.

Some say that far from encouraging open competition, Japan Post will be allowed to encroach on rivals by introducing new investment services and new insurance products before a more level playing field is created.

Another issue is whether foreign firms will have equal footing to sell investment products through the newly privatized bank. So far, they have been granted only a minor role, with Goldman Sachs Asset Management the only foreign firm chosen from a dozen that applied to sell their funds.

Meanwhile, some analysts say the mammoth organization — largely lacking expertise in more sophisticated investments — could struggle to stay profitable. That raises the risk the bank could start selling off its huge government bond holdings, causing a hike in yield and ultimately adding to the government's debt payments.

"The concept of postal privatization is good. It will inject competition into the banking sector and raise the overall quality of financial institutions, and would encourage more risk-taking behavior and revitalize the economy," said Junsuke Senoguchi, a banking analyst at Lehman Brothers Japan.

While scholarship, grant money and government-backed student loans — whose interest rates are capped — have taken up some of the slack, many families and individual students have turned to private loans, which carry fees and interest rates that are often variable and up to 20 percent.

Many in the next generation of workers will be so debt-burdened they will have to delay home purchases, limit vacations, even eat out less to pay loans off on time.

Kristin Cole, 30, who graduated from Michigan State University's law school and lives in Grand Rapids, Mich., owes $150,000 in private and government-backed student loans. Her monthly payment of $660, which consumes a quarter of her take-home pay, is scheduled to jump to $800 in a year or so, confronting her with stark financial choices.

"I could never buy a house. I can't travel; I can't do anything," she said. "I feel like a prisoner."

A legal aid worker, Cole said she may need to get a job at a law firm, "doing something that I'm not real dedicated to, just for the sake of being able to live."

Parents are still the primary source of funds for many students, but the dynamics were radically altered in recent years as tuition costs soared and sources of readily available and more costly private financing made higher education seemingly available to anyone willing to sign a loan application.

NEW YORK (Reuters) - Friday's news of a buckling U.S. job market sent stock investors running for the exits, and this week promises to be no less stressful as investors grapple with the increasing possibility of an economic recession.

The weekend will also give investors time to reflect on news U.S. employers cut payrolls by 4,000 jobs last month.

However, it is unlikely that there will be much clarity ahead of the anxiously awaited Federal Reserve interest-rate decision in the coming week, as investors debate whether and by how much the Fed will cut key interest rates.

"The pendulum is going to swing between the euphoria -- we're going to get a rate cut, things are not that bad -- to the world is going to end, we're going into a recession," said John Praveen, chief investment strategist at Prudential International Investments Advisers LLC in Newark, New Jersey.

The Dow Jones industrial average (.DJI) fell 249.97 points, or 1.87 percent, to end at 13,113.38. The Standard & Poor's 500 Index (.SPX) was down 25.00 points, or 1.69 percent, at 1,453.55. The Nasdaq Composite Index (.IXIC) was down 48.62 points, or 1.86 percent, at 2,565.70.