Number of Corporate Bankruptcies in Japan Rises 6.6 Percent in April

Tokyo (ANTARA) - The number of corporate bankruptcies with liabilities of at least 10 million yen (1 yen = Rp111) in Japan rose 6.6 percent from the previous year to 883 cases in April, according to a survey by a credit research firm released on Wednesday (13/5).

Company failures caused by rising prices reached the third-highest level in history, with 85 cases, as the weakening yen drives up costs for imported raw materials and energy, according to Tokyo Shoko Research.

In addition to cost increases due to inflation, rising labour costs and gradually higher interest rates are eroding corporate profits, leading to greater cash flow pressures for more companies, the survey revealed.

Furthermore, supply-side impacts from naphtha shortages and soaring crude oil prices triggered by conflicts in the Middle East are heightening concerns.

An official at the research institute stated that the business environment will become increasingly harsh if disruptions in the Strait of Hormuz continue, potentially leading to rising bankruptcies through the summer.

By industry, bankruptcy numbers increased year-on-year in seven sectors, including construction, manufacturing, and wholesale trade.

The construction sector recorded a 21.7 percent surge to 185 cases, reflecting weakening housing purchase demand partly triggered by soaring property prices and high housing loan interest rates.