Japanese Business Bankruptcies Fall to 24 Year Low

The number of business failures in Japan in 2014 with debts of at least 10 million yen declined 10.4 percent from the previous year to a 24-year low of 9,731, a credit research agency said Tuesday.

Corporate bankruptcies fell for the sixth straight year as banks maintained easy lending conditions for small companies, with the government front-loading public works orders, Tokyo Shoko Research said.

Liabilities left by bankrupt companies last year plunged 32.6 percent to 1.87 trillion yen, slipping below 2 trillion yen for the first time in 24 years.

No publicly traded company went bankrupt in the year for the first time since 1990.

Bankruptcies declined in the construction and manufacturing sectors but increased in the real estate, services, agricultural, and forestry and fisheries sectors.

In December alone, the number of corporate bankruptcies dropped 8.5 percent from a year earlier to 686, with liabilities totaling 178.31 billion yen, up 32.7 percent.

As last April’s consumption tax increase has affected small companies’ earnings recovery, business failures may begin to rise slightly in early spring, Tokyo Shoko Research said.

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