Japan April bankruptcies climb to 12-year monthly high as costs rise
Corporate failures in Japan hit their highest April level in 12 years, with price-driven collapses surging as smaller firms came under mounting pressure.
- Corporate bankruptcies in Japan rose to 883 in April, a 6.6% increase from the previous year and the highest figure for that month in 12 years.
- The primary cause was rising costs, with failures attributed to higher prices jumping by 51.7%, driven by a weaker yen and soaring raw material prices.
- The bankruptcies were heavily concentrated among smaller businesses, which accounted for approximately 80% of the total cases.
- The increase in failures was widespread, affecting seven out of ten business sectors, including construction and wholesale.
Corporate bankruptcies in Japan involving debts of at least 10 million yen rose to 883 in April, up 6.6 per cent from a year earlier and the highest figure for the month in 12 years, Tokyo Shoko Research Ltd. said on Wednesday (May 13).
Failures blamed mainly on rising prices jumped 51.7 per cent to 85, as companies struggled with higher costs linked to a weaker yen and soaring raw material prices.
A Tokyo Shoko Research official warned that pressure could intensify amid concerns over naphtha supplies caused by the Middle East conflict. “Smaller companies being driven into bankruptcy may become a reality,” the official said.
Bankruptcies increased in seven of the 10 sectors covered by the survey, including construction and wholesale. The service sector, however, recorded a 5.1 per cent fall in failures to 277.
Cases caused by labour shortages stood at 33 in April, down from 36 a year earlier.
Total liabilities at failed companies rose 8.8 per cent to 111.896 billion yen. Cases with liabilities below 100 million yen made up about 80 per cent of the total, underscoring the concentration of bankruptcies among smaller businesses.
[Copyright The Jiji Press, Ltd.]
