Japan’s corporate bankruptcies rise 16%

 

 

 Japan’s corporate bankruptcies rise 16% TOKYO, Feb 9 – Japan’s corporate bankruptcies rose 15.8 percent in January from a year earlier to 1,360 cases, a six-year high for the month, hit by a deeper economic crisis and the effects of the credit squeeze on smaller firms, a research firm said on Monday.The number of bankruptcies among listed companies has hit a record high for any financial year since World War Two, having climbed to 35 so far for the year to March 31, including real estate fund operator Creed and three others in January, Tokyo Shoko Research said.The number of bankruptcy cases in January rose for the eighth straight month, while total debt involved expanded 44.3 per cent to 838.99 billion yen ($9.14 billion), up for the fifth straight month, it said.It said increased bank borrowing by large companies, which are faced with growing short-term financing needs and unfavourable capital market conditions, have eaten into banks’ ability to lend to smaller companies.Failures among manufacturers in particular jumped amid waves of production cuts by carmakers, with bankruptcies among secondary parts suppliers and peripheral companies for manufacturers, Tokyo Shoko Research said.Tokyo Shoko Research said it doubted bankruptcies would slow down in the near term, because major manufacturers not only in the car industry but also in the electronics and semiconductor sectors continue to suffer from poor earnings. 

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One Response to Japan’s corporate bankruptcies rise 16%

  1. Jenwu says:

    I think the big Japaness bankruptices will eventually force the smaller companies to close down. Just like a survival competition, stronger ones will eat the little ones, the larger companies are more likely to survive in this. So I guess in short-term we will see more job losses, and I believe the the world economy is still in the recession stage, and crisis will continue to worsen until it reaches to a total slump, which everybody starts to realize that they can no longer stand the economy, not only the business people, so the banks will start to take some actions, and the government will lower their taxation and interest rates try to evoke economic growth, and hopefully it will increase business confidence, and bring the business cycle back up to recovery stage.

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