Japan July Bankruptcies Hit 13-Year High

Tokyo, Aug. 10 (Jiji Press)–Corporate bankruptcies with liabilities of at least 10 million yen in Japan in July rose 6.9 pct from a year before to 1,028, the highest level for the month in 13 years, Tokyo Shoko Research Ltd. said Monday. The number of failures topped 1,000 for the second straight month. Bankruptcies attributed to labor shortages reached a monthly record high of 63. Of them, 36 were linked to rising labor costs, more than double the 17 a year earlier. Business failures traced to inflation reflecting factors such as the yen’s weakening and higher crude oil prices totaled 93, exceeding the year-before figure for the eighth straight month. The research firm said that companies continued to face rising labor costs, prices and interest burdens. “With the season of stronger demand for funds approaching, corporate bankruptcies are likely to increase at an accelerated pace,” it added. Seven of the 10 sectors covered by the data recorded more failures than a year earlier. Bankruptcies of construction companies rose 9.8 pct to 200, reaching the threshold for the first time in 12 years and nine months. Failures rose 24.1 pct to 139 in the retail industry and 62.5 pct to 52 in the information and communications sector. Total liabilities rose 41.4 pct to 236,312 million yen. The surge reflected the bankruptcy of Zentoshin, a credit card payment processing service firm based in the western city of Osaka. END [Copyright The Jiji Press, Ltd.]