Japan Aug. Corporate Bankruptcies Hit 14-Year High at 830

Tokyo, Sept. 8 (Jiji Press)–Corporate bankruptcies with liabilities of at least 10 million yen in Japan in August rose 3.1 pct from a year earlier to 830, marking the highest level for the month in 14 years, Tokyo Shoko Research Ltd. said Tuesday. Labor shortages and sluggish sales were among the main factors behind the increase. Bankruptcies attributed to labor shortages, including rising labor costs and employee departures, rose to 32, a record high for August, up from 23 a year earlier. The credit research company said wage increases have spread to small and midsize companies as labor shortages deepen, warning that “overly ambitious wage hikes could further strain companies’ cash flows.” By industry, the services and related sectors accounted for the largest number of bankruptcies, at 291, up 20.2 pct. Among them, the number of bankruptcies in the restaurant sector, including “izakaya” Japanese-style pubs, surged 42.8 pct to 80. Bankruptcies also grew year-on-year in the construction and retail industries. Total liabilities of failed companies rose 26.5 pct to 144,728 million yen, increasing for the sixth consecutive month. The number of bankruptcies involving liabilities of at least 1 billion yen surged to 21 from 12, contributing to the increase in overall liabilities. END [Copyright The Jiji Press, Ltd.]