Biz failures hit 27-year low in 2017

January 17, 2018

Tokyo- The number of corporate bankruptcies in Japan fell to a 27-year low in 2017 as financing of companies improved thanks to gradual economic recovery and low interest rates, Tokyo Shoko Research Ltd. said Tuesday.

The number of business failures fell 0.4 percent from the previous year to 8,405, marking the ninth consecutive year of decline and the lowest level since 6,468 recorded in 1990, the private credit research company said.

Total liabilities left by companies that went bankrupt in 2017 surged 57.8 percent to 3,167.6 billion yen, including 1,502.4 billion yen left by air bag maker Takata Corp. in the biggest failure in the Japanese manufacturing industry since the end of World War II.

The survey covered failures involving liabilities of 10 million yen or more.

The number of bankruptcies dropped in nine of the 10 industry sectors covered in the survey, including the manufacturing industry, down 10 percent, and the retail sector, which saw a 5.0 percent decline.

The service sector, including restaurants, posted a 9.7 percent increase amid rising material and labor costs.

Bankruptcies rose in Hokkaido and Kinki, and decreased in seven other regions. Among Japan's 47 prefectures, Tokyo, Osaka, Hyogo and Aichi saw higher numbers.

The number of bankruptcies went up in metropolitan areas where personnel costs have been growing noticeably amid serious labor shortages, a Tokyo Shoko Research official said.

On the future outlook, the official said corporate bankruptcies show stronger signs of being on a gradual rise. Jiji Press