Japan’s bankruptcies hit a decade-high in the first half of this year, data from a research firm showed on Friday, as high prices, labor shortages and a reduction in COVID-19 relief efforts hampered management.
According to credit research firm Teikoku Databank, there were 4,887 bankruptcies between January and June, a 22% increase from the same period a year ago.
Total debt from bankruptcies between January and June was about ยฅ681.02 billion ($4.24 billion), down 25 percent from a year ago. The debt came mainly from small and medium-sized companies, the research firm said in a report.
“The rapid depreciation of the yen and disappointing consumer spending kept the business environment for small and medium-sized enterprises poor in the second half of the year,” the report said.
The number of bankruptcies could exceed 10,000 by the end of the year, the report said.
According to the report, the service industry saw the number of bankruptcies exceed 1,200 for the first time in 15 years. In the retail sector, the number of restaurant bankruptcies reached the highest level since 2000.
The Bank of Japan ended eight years of negative interest rates and its control over government bond yields in March, taking a historic step away from its longstanding radical stimulus program.
The central bank discussed the possibility of a near-term rate hike at its June policy meeting. There was speculation that rising inflationary pressures could lead the bank to consider a rate hike at this month’s meeting.
