News Article

Corporate bankruptcies in Japan hit 28-year low in fiscal 2018

Corporate bankruptcies across Japan fell in fiscal 2018 to their lowest number since fiscal 1990, when the country was in the final stage of the bubble economy era, according to a private credit research firm.

Bankruptcies dropped 3.0 percent from 2017 to 8,111, down for the 10th consecutive year, data released Monday by Tokyo Shoko Research Ltd. showed.

The figure, covering business failures involving liabilities of ¥10 million or more, mainly reflected a recovery in the economy and the active financing stance of banking institutions.

Meanwhile, the number of bankruptcies triggered by labor shortages stood at 400, rewriting the record high since that part of the survey began in fiscal 2013, showing that small companies are continuing to struggle with business succession and securing workers.

“Bankruptcies may rise gradually, as small businesses mired in business slumps have tough business outlooks,” Tokyo Shoko Research said.

Total liabilities left by failed companies in fiscal 2018 declined 47.4 percent to ¥1.6192 trillion.

The sum of liabilities almost halved, in a positive reaction after air bag maker Takata Corp.’s bankruptcy, the largest postwar business failure in the Japanese manufacturing sector, in fiscal 2017.

The number of bankruptcies increased in four of the country’s nine regions: Tohoku, Hokuriku, Shikoku and Kyushu.

By industry, business failures increased noticeably in the services sector, including elderly welfare and nursing care, and the logistics sector, which suffers from serious manpower shortages.

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