If lenders were to take over Kobe Steel, a break-up of the company along business lines would be beneficial for shareholders, according to Thanh Ha Pham, an analyst at Jefferies Japan, who has a "buy" rating for the company.
Late on Wednesday it said it had found 70 cases of tampering with data on materials used in optical disks and liquid crystal displays at its Kobelco Research Institute Inc, which makes and tests products for the company.
It also found one case of falsified data on iron powder products - material used for vehicle parts such as gears - that were shipped to a customer. Kobe Steel customers from Toyota Motor Corp.to Subaru Corp. are scrambling to determine if they used the suspect materials and whether safety has been compromised. It could also undermine confidence in Prime Minister Shinzo Abe's moves to improve corporate governance as part of his program of Abenomics.
Toshiba is still working to recover from an accounting scandal that began in 2015.
Toyota called the revelations a "grave issue", and said it was making checks on where the components were used and what effect they have on products using them.
Kobe Steel, Japan's third-largest steel maker, has announced that between September 1, 2016 and August 31 of this year, it sold aluminium and copper materials using falsified data on such things as the products' strength.
Kobe Steel shares closed at the limit low after being untraded for the whole session, diving 22 percent to 1068 yen.
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He said the company - which has said it was examining possible data falsification going back 10 years - has begun an external investigation of all its units, including those overseas.
Aluminum castings, forgings and flat-rolled items, along with copper strips and tubes were among the products affected, the company said in a statement. He was speaking before meeting an industry ministry official to discuss the matter. "But we are still investigating and it's premature to say if recalls will be necessary".
A Kobe spokesman told Reuters the firm is working with customers to check for any issues.
"We have confirmed that aluminium from Kobe Steel is used in the hoods and doors of some of our vehicles", Nissan said in an email.
Aircraft maker Boeing said it, too, is looking into the problem.
United States plane manufacturer Boeing also said it had not found any safety issues.
Mr Kawasaki told reporters on Thursday that Japan's trade ministry also wants Kobe Steel to provide reasons for the data fabrication and prevention measures within a month, Reuters said.