Business

Business failures fell below 10,000 in fiscal 2014, first time in 24 years

Kyodo

The number of corporate bankruptcies fell 9.4 percent in fiscal 2014 to 9,543, dropping below 10,000 for the first time in 24 years, according to the Tokyo Shoko Research.

The credit research agency attributed the decrease to banks allowing small and midsize companies more time to repay loans.

Another factor was expedited placement of public works orders as part of economic stimulus to cope with the negative impact of the consumption tax hike in April 2014, Tokyo Shoko Research said Wednesday.

But an agency official expressed concern that the number of bankruptcies could increase moderately down the road as “quite a lot of companies are seeing a delay in achieving self-sustaining recoveries in their earnings.”

Over the 12 months through March, the number of business failures involving debts of ¥10 million or more dropped for the sixth straight year.

Overall liabilities left by bankrupt firms declined 32.7 percent to ¥1.87 trillion, slipping below ¥2 trillion for the first time in 25 years, as the number of large-scale bankruptcies with debts of ¥10 billion or more declined, the agency said.

Skymark Airlines Inc., Japan’s third-largest airline, was the only listed company to go bankrupt in fiscal 2014.

The number of failures linked to the weaker yen, which has pushed up raw material costs, increased by about 40 percent to 260.

Eight of the nation’s nine regions saw declines.

Shikoku was the only area that logged a rise, partly because manufacturing and wholesale industries were hit by the rise in costs on the back of the yen’s depreciation.

In March alone, bankruptcies increased 5.5 percent from a year earlier to 859. Debts left by bankrupt firms grew 91.1 percent to ¥223.6 billion.