More than 3,000 companies went bankrupt in April-September as businesses failed to pay off Covid-related debts
The number of corporate bankruptcies in Japan saw a year-on-year increase of 6.9% to 3,141 over April-September, the first increase in three years, Kyodo News reported on Sunday citing a survey by Tokyo Shoko Research, according to RT.
The surge stems from the challenges Japanese businesses encountered in repaying government financial aid they had received in response to the pandemic, the credit research company said.
The analysts added that cases of insolvency have been on a steady rise since August due to high raw material prices triggered by a drop in the yen against the US dollar and other major currencies.
In September alone, the number of bankruptcies in Japan was up 18.6% from a year earlier to 599, the survey showed.
The total liabilities left by bankrupt corporations soared threefold to 1.74 trillion yen ($11.70 billion) over the six-month period. A significant contributor to this figure was Marelli Holdings, a leading auto parts manufacturer, which filed for court bankruptcy protection in June under Japan’s civil rehabilitation law.
The transport sector recorded 162 bankruptcy cases, up 42.1% and the first increase in three years. The surge was attributable to soaring fuel prices. Meanwhile, the real estate sector posted 104 cases, down 5.4%, marking the lowest number in 30 years.
The service sector saw a total of 215 bankruptcies, the highest among the various industries and up for the eighth straight month, while the fastest growth in the number of cases was recorded in construction, which rose by 29.8% from a year earlier.
The regional breakdown shows that 29 prefectures, including Hokkaido and Kyoto, saw the number of bankruptcies increase, while 16, including Osaka and Hiroshima, recorded a decrease. Two prefectures, Shizuoka and Nagasaki, posted flat figures.
