Japan's Crippling Economic Strain: Corporate Bankruptcies Shatter 11-Year Record

(MENAFN) New data reveals a significant surge in corporate bankruptcies across Japan, exceeding 800 cases in April for the first time in over a decade. Research from Teikoku Databank on Monday indicated that this increase underscores mounting economic pressures stemming from rising costs and a scarcity of available workers.

The firm reported that a total of 826 companies, each carrying debts of 10 million yen (approximately 67,490 U.S. dollars) or more, initiated formal insolvency proceedings in April. This figure represents the 36th consecutive month of year-on-year increases in bankruptcies.

Examining specific sectors, the service industry experienced 215 bankruptcies, while the retail sector saw 195. Notably, these figures represent the highest April counts for both sectors since the year 2000. Analysts attribute this rise to ongoing inflation, which has prompted consumers to reduce spending, coupled with a persistent shortage of labor impacting businesses.

While Teikoku Databank noted that the direct impact of U.S. tariff measures has not yet significantly deteriorated business finances, the firm warned of potential future risks. They cautioned that a reactivation of currently suspended reciprocal tariffs could lead to decreased exports and capital investment, subsequently hindering growth in individual consumer spending.

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