Japan corporate bankruptcies up for 3 months in row

The number rose to its highest level in 12 years for August, due to soaring material costs and labour shortages, the credit research company said. The data covered failures involving liabilities of 10 million yen or more.

Total liabilities left by failed companies increased 12.8% to 114,373 million yen, marking the first rise in six months. Many cases were smaller bankruptcies with debts of less than 100 million yen.

Among major industries, the real estate, construction, transport and retail sectors logged increases in bankruptcies.

The survey also showed that there were 55 bankruptcies triggered by soaring prices, while 23 companies went belly up because of labour shortages caused by higher labour costs and others.

Tokyo Shoko Research recognised an increase in business risks, such as those stemming from higher interest rates and US President Donald Trump's tariff policy.

Small and midsize businesses with delayed recoveries are likely to struggle to secure new funding toward year-end, possibly leading to a further increase in bankruptcies, a Tokyo Shoko Research official said.

 [Copyright The Jiji Press, Ltd.]