The Hindu : Japan bankruptcies fall

Online edition of India's National Newspaper
Tuesday, Apr 15, 2003

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Business

Japan bankruptcies fall

TOKYO APRIL 14. Bankruptcies in Japan fell by around 5 per cent in the just-ended business year, a research firm said on Monday, as a mild economic recovery and banks' reluctance to cut off ailing firms helped limit failures.

Independent research firm Teikoku Databank warned that the stock market's plunge to 20-year lows could cause a spike in bankruptcies in the new business year, but some economists say that is unlikely given the political fallout. Teikoku said the number of bankruptcies dropped 5.6 per cent to 18,928 in the year to March 31, the fourth highest level in the post-war period, with total debts of failed firms down 17.5 per cent at 13.31 trillion yen ($110.3 billion). The annual trend was reflected in March, when bankruptcy cases fell 1.1 per cent on the month to 1,568, down 12.3 per cent from the same month in the previous year. Debts of firms that went bust in March totalled 1.18 trillion yen, a 42.1 per cent fall from a year earlier and a 22.9 per cent fall from February.

Economists put the improvement down to a combination of steady, albeit very slow, economic growth and steps taken by the government to support vulnerable firms and thus avoid the political fallout from mass bankruptcies. — Reuters

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