Japan Jan.-June Biz Failures Top 5,000 for 1st Time in 12 Yrs

Tokyo, July 8 (Jiji Press)–The number of corporate bankruptcies in Japan with debts of at least 10 million yen in January-June surpassed 5,000 for the first time in 12 years on a first-half basis, reflecting labor shortages and inflation, Tokyo Shoko Research Ltd. said Wednesday. The six-month total grew 7.1 pct from a year earlier to 5,346, including six bankruptcies linked to the turmoil in the Middle East. The first-half figure last exceeded 5,000 in January-June 2014, when 5,073 bankruptcies were recorded. In the latest first-half, the number of bankruptcies related to labor shortages rose 37.7 pct to 237. Many businesses cited soaring labor costs as the reason for their failures. Inflation-triggered bankruptcies, including those linked to companies being unable to pass higher costs on to customers, rose 27.6 pct to 439, the highest since 2022. Total liabilities left by failed companies rose 6.3 pct to 734,082 million yen. The increase reflected a climb in the number of business failures leaving debts of 1 billion yen or more. One company went bankrupt after its plan to sell products in the Middle East collapsed due to fighting in the region. The turmoil in the Middle East led to business failures in the construction and manufacturing sectors. “Costs are continuing to rise due to inflation amid uncertainty over the situation in the Middle East, and corporate bankruptcies may increase in autumn and beyond,” a Tokyo Shoko Research official said. In June alone, the number of business failures surged 20.4 pct from a year before to 1,021. Liabilities left by failed companies jumped 25.9 pct to 133,150 million yen, up for the fourth straight month. END [Copyright The Jiji Press, Ltd.]