Japan Biz Failures Hit 13-Year High for Oct.

Tokyo, Nov. 11 (Jiji Press)–The number of corporate bankruptcies in Japan in October involving liabilities of at least 10 million yen reached 965, the highest level for the month in 13 years, Tokyo Shoko Research Ltd. said Tuesday. The figure rose 6.1 pct from a year earlier. The increase reflected higher prices for imported raw materials caused by the yen’s weakening, which drove up costs across a wide range of sectors, including food, steel and energy. The number of bankruptcies linked to higher prices surged 88.8 pct to 85, with restaurants and food manufacturers, which struggled to pass on rising costs, particularly affected. Labor shortages also remained severe, with the number of bankruptcies linked to soaring labor costs rising 2.2-fold. Amid rising prices, overly ambitious wage hikes may worsen funding difficulties, a Tokyo Shoko Research official said. By industry, the services sector logged the largest number of bankruptcies, at 326, up 7.5 pct. The real estate sector recorded 33 bankruptcy cases, up 57.1 pct and marking the sixth consecutive monthly increase, as rising interest rates pushed more land sales businesses into insolvency. Total liabilities left by failed companies, however, fell 49.5 pct to 127,521 million yen, following the large-scale bankruptcy of audio and video equipment maker Funai Electric Co. in the western prefecture of Osaka a year before. END [Copyright The Jiji Press, Ltd.]