Business / Corporate

Bankruptcies across Japan in the first half fell to a 29-year low

JIJI

The number of corporate bankruptcies in January-June fell 3.7 percent from a year earlier to 3,991, down for the 10th consecutive first-half period and hitting the lowest level in 29 years, according to Tokyo Shoko Research Ltd.

Total liabilities left by the failed businesses came to ¥762.360 billion, up 2.1 percent, the credit research firm said Monday.

The survey covered failures of companies with liabilities of ¥10 million or more.

Despite the decline in the number of bankruptcies, Tokyo Shoko Research noted that services providers including restaurants, as well as transport companies, are struggling with higher manpower costs due to the labor shortage.

The rise in total liabilities, meanwhile, mainly reflected the collapse of MT Picture Display Co., a Kadoma, Osaka Prefecture-based cathode-ray tube subsidiary of Panasonic Corp. with debts of a little over ¥100 billion.

The number of companies that went under with liabilities of ¥1 billion or more came to 88, the fewest in 30 years.

In June alone, 734 businesses went bankrupt, up 6.3 percent year on year, leaving liabilities of ¥86.957 billion, down 60.3 percent.

A Tokyo Shoko Research official said the first rise in a decade in combined reserves for possible loan losses at 111 banks in the last business year suggests a “changing trend” in the attitudes of banks, which had been willing to accept debt-rescheduling requests to help prevent bankruptcies.