Japan business failures hit 11-year high for April
The number of corporate bankruptcies with debs of at least ¥10 million in Japan totaled 828 in April, the highest level in 11 years for the reporting month, amid inflation and rising labor costs, Tokyo Shoko Research said Monday.
The monthly figure rose 5.7% from a year before. More failures were seen mainly among smaller companies with weak business bases as their revenue was squeezed by rising prices and higher labor costs amid labor shortages.
Total liabilities left by failed companies fell 9.3% to ¥102.8 billion, reflecting a smaller number of failures with debts of ¥100 million or more.
Meanwhile, the number of smaller bankruptcies, with debts of less than ¥100 million, rose 11.3%, accounting for nearly 80% of all failures.
The number of failures due to labor shortages grew to 36 from 25 a year before, while the number of bankruptcies because of inflation remained high, at 56, against 60.
By industry, the services sector had 292 bankruptcy cases, a record for April, up 10.6%.
Bankruptcies numbered 152 in the construction sector, up 4.1%, and 106 in the retail sector, up 32.5%.
The high tariff policy of U.S. President Donald Trump's administration has so far had a limited impact on bankruptcies in Japan, a Tokyo Shoko Research official said.
With many smaller companies still shouldering excessive debts from the COVID-19 pandemic, however, the U.S. tariff policy could put a dent on Japanese companies' order receipts and result in more failures mainly in the manufacturing sector, the official said.
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