The number of corporate bankruptcies in Japan related to the coronavirus crisis exceeded 200 on Monday.
As of Monday afternoon, 202 business failures linked to the crisis had been confirmed, according to Teikoku Databank Ltd, a Tokyo-based private credit research agency. The accommodation sector had the largest number of such failures, at 39, as restrictions on the movement of people remain even though the government's state of emergency over the epidemic was fully lifted on May 25.
The restaurant sector followed, with 25 cases, while the number stood at 16 among clothing, sundry goods and shoe retailers.
Coronavirus-related bankruptcies have occurred in 39 of the country's 47 prefectures. Tokyo had the highest number, at 45, followed by Hokkaido and Osaka Prefecture, with 17 cases each. The prefectures of Hyogo and Shizuoka saw 13 and 12 cases, respectively.
It is believed that many of the failed firms' struggles predate the outbreak, and drops in demand caused by the epidemic pushed them beyond the breaking point.
The first coronavirus-related bankruptcy in the country, involving croquette-maker Hokkaido Santomiya, was confirmed on Feb. 26.
While many of the companies were small enterprises, major firms have also been hit hard by the coronavirus crisis.
Renown Inc., an apparel-maker listed on the first section of the Tokyo Stock Exchange, filed for civil rehabilitation procedures on May 15, effectively going bankrupt. The company is set to be delisted in mid-June.
"Legal liquidations of large companies can trigger massive chain-reaction bankruptcies, so close attention should be paid," an official of Teikoku Databank said.
To protect companies from the economic fallout, the government drafted a relief package worth ¥117 trillion to implement an array of measures, such as making effectively interest-free unsecured loans available to struggling firms and giving them tax payment moratoriums.
The government also approved a second extra budget bill last week to finance another ¥117 trillion scale package. Fresh measures include boosting loans and covering one-third or two-thirds of rent for stricken business operators. The second extra budget bill is expected to be submitted to the Diet next week.