Bankruptcy rate among Japanese firms rises by 22 percent in first half of 2024
(MENAFN) The Tokyo Shoko Research Organization announced on Monday that the bankruptcy rate among Japanese corporate firms increased by 22 percent in the first half of 2024 compared to the same period in 2023. This surge in bankruptcies is attributed to a combination of economic challenges, including the recent depreciation of the Japanese yen and rising raw material costs. These factors have significantly strained corporate finances, leading to a notable increase in insolvencies. As a result, the total financial liabilities left by these insolvent firms have risen by 22.8 percent year-on-year, amounting to 721 billion Japanese yen, which is approximately USD4.49 billion.
During the first six months of the year, 4,931 firms declared bankruptcy, marking the highest number of bankruptcies recorded in the last decade. The report highlighted that the services sector was the hardest hit, with 1,619 firms going under, reflecting the sector's vulnerability to economic fluctuations and increased operational costs. The construction sector also faced substantial challenges, with 947 companies filing for bankruptcy, indicating widespread financial distress within the industry.
The organization further warned that the number of bankruptcies could exceed 10,000 by the end of 2024 if current trends continue. Many firms are struggling to manage rising costs, which they are increasingly passing on to customers. This situation could exacerbate financial instability and lead to further insolvencies. The projection underscores the severity of the economic pressures faced by Japanese businesses and highlights the potential for continued financial turbulence within the corporate sector. The ongoing economic challenges demand urgent attention to mitigate further damage and stabilize the business environment.
MENAFN08072024000045015839ID1108417205
Legal Disclaimer:
MENAFN provides the information “as is” without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the provider above.