Japan Bankruptcies Highest In 5 Years: Mainichi Shimbun

The number of corporate bankruptcies in Japan for the first six months of 2023 rose 32.1% from a year earlier to a five-year high of 4,042, as businesses took on debt to stay afloat amid the pandemic, a survey by a credit research company showed, Mainichi Shimbun reported.

Photo Insert: Business insolvencies resulting from rising prices increased 3.3-fold to 300.

The rise in failures involving liabilities exceeding 10 million yen ($70,000) comes as many companies have begun repaying interest-free and unsecured loans, which lenders extended under a government program in response to the pandemic, Tokyo Shoko Research Ltd. said.

Rising material and labor costs have also affected businesses, the research firm said.

In total, 322 cases involved companies funded by the emergency program, almost doubling from a year before.

Business insolvencies resulting from rising prices increased 3.3-fold to 300, according to the firm. The number of corporate bankruptcies could increase further, especially among firms that have been slow to recover from the pandemic, the firm said.

The total liabilities left by bankrupt companies fell 45.3% to 934 billion yen in the six months after surging last year due to an extraordinarily large debt held by Marelli Holdings Co., a major auto parts maker.

WEEKLY FEATURE : MVP Group Keeps Lights On During Pandemic