Japan Biz Bankruptcies Hit 13-Year High in Jan.

Tokyo, Feb. 9 (Jiji Press)–The number of corporate bankruptcies in Japan in January involving liabilities of at least 10 million yen totaled 887, the highest level in 13 years, Tokyo Shoko Research Ltd. said Monday. The figure rose 5.5 pct from a year earlier, marking an increase for the second straight month, driven by growth in bankruptcies caused by sluggish sales. Five of the 10 industries surveyed saw year-on-year rises in business failures, including the services, retail, wholesale and transportation sectors. Bankruptcies stemming from weak sales climbed 6.3 pct to 649, accounting for the largest share of total failures. Failures linked to accumulated losses stood at 116, up 18.3 pct. Bankruptcies due to high prices, where companies could not pass on rising costs and saw profits squeezed, jumped 24.5 pct to 76. “This suggests the impact of sluggish real wage growth on consumer behavior,” a Tokyo Shoko Research official said. Meanwhile, bankruptcies attributed to rising labor costs surged to 19 cases, nearly tripling from a year earlier, as a growing number of small and midsize firms were forced to raise wages to secure workers, worsening their cash positions. Total liabilities left by failed companies fell 1.3 pct to 119,815 million yen. There was no failure with liabilities of 10 billion yen or more in the reporting month, while midsize companies accounted for a sizable share of total liabilities. END [Copyright The Jiji Press, Ltd.]