Toshiba issued a very brief statement on their site in response to Japanese media reports that Toshiba will discontinue its HD DVD business.

Complete statement: "The media reported that Toshiba will discontinue its HD DVD business. Toshiba has not made any announcement concerning this. Although Toshiba is currently assessing its business strategies, no decision has been made at this moment."
The Japanese stock market likes the idea though of Toshiba dropping HD DVD, as Toshiba's stock jumped 5.7% today.

There is no other choice at this point for Toshiba than to burry HD DVD. Hollywood studios, retailers, movie rental companies, and the media have already declared it dead.
Via the Toshiba site.