Bankruptcies in Japan Drop to Lowest Level in 22 Years

The number of corporate bankruptcies in Japan fell 10.9 percent from a year earlier to 5,620 in the first six months of this year, hitting the lowest level in 22 years for a first half-year period, a credit research agency said Monday.

Tokyo Shoko Research noted that liabilities left by failing businesses with at least 10 million yen in debt also fell 10.4 percent to 1.80 trillion yen during the January-June period due to a decline in the number of large-scale bankruptcies.

In June alone, the number of corporate bankruptcies declined 8.0 percent from a year earlier to 897 for the eighth consecutive monthly decline.

The total debts of failed firms in the reporting month, however, more than doubled to 383.7 billion yen, largely due to a large-scale failure of ITM Securities Co., an affiliate of AIJ Investment Advisors Co. involved in a pension fund defrauding scandal.

On the six-month period, an official of the research company said debt repayment moratoriums under the financing facilitation law for small businesses, which expired at the end of March, helped reduce the number of bankruptcies.

Out of 10 industries, seven industries, including the construction, retail, and real estate sectors, saw fewer bankruptcies in the first half, while the remaining three industries including the transport sector marked more business failures amid rising fuel costs stemming from the yen’s depreciation.

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