Japan Business Failures at Lowest Level in 24 Years

Business failures in Japan between April and September fell 8.3 percent from a year earlier to 5,049, the fewest in 24 years for the period, a research firm said Wednesday.

Bankruptcies in the first half of fiscal 2014 fell for the sixth straight year as financial institutions have been increasingly agreeing to extend debt repayment periods for small and medium-sized businesses, and some companies have benefited from an increase in public works projects, Tokyo Shoko Research Ltd. said. The firm counted bankruptcies with liabilities of 10 million yen or more.

Total bankruptcy liabilities were down 49.5 percent to 907.8 billion yen, with no large failures during the period.

But failures attributed to the weaker yen, which has raised the cost of imported raw materials, more than doubled, the research company said. The yen has tumbled from around 98 to the dollar in late September last year to more than 108 late last month.

“Conditions will worsen for small and mid-sized businesses if the yen continues its downtrend, as it is difficult for them to pass on cost increases,” a Tokyo Shoko Research official said.

Among 10 business sectors, failures declined across seven sectors including construction and retail, but rose in real estate, services, and agriculture and mining.

In September alone, bankruptcies were up 0.9 percent from a year earlier at 827.

via Mainichi

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza