Japan corporate bankruptcies hit 28-year low in FY 2018

April 8, 2019

Tokyo--The number of corporate bankruptcies in Japan in fiscal 2018 hit the lowest level since fiscal 1990, when the country was in the final stage of its bubble economy era, a private credit research firm said Monday.

Bankruptcies dropped 3.0 pct from the previous year to 8,111 in fiscal 2018, which ended in March, down for the 10th consecutive year, Tokyo Shoko Research Ltd. said.

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

Meanwhile, the number of bankruptcies triggered by labor shortages stood at 400, rewriting the record high since this 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 pct to 1,619.2 billion yen.

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. The four were 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. Jiji Press