Japanese bankruptcies top 8,000 in first half: survey

Japanese corporate bankruptcies topped 8,000 in the six months to June, the highest first-half level in six years, as the global economic downturn deepened, a survey showed Wednesday.

The number of companies that failed with debts of 10 million yen (105,000 dollars) or more each totalled 8,169 in the January-June period, up 8.2 percent from a year earlier, Tokyo Shoko Research reported.

Their combined debts jumped 47.3 percent from a year-earlier to 4.69 trillion yen.

In June alone, 1,422 firms went under, up 18.2 percent from May and the highest for the month since June 2002 when 1,439 companies collapsed, the research firm said.

"The government has declared the economy hit bottom but company failures do not show it," said Masashi Seki, an official at the research firm.

While some large companies such as automakers are seeing signs of an improvement in their business, smallers firms are struggling and relying on government assistance such as loan guarantees, he said.

"Small companies must already be spending borrowed money for their day-to-day business. Unless the economy picks up strongly, bankruptcies will rise further," Seki said.

The bankrupt companies had combined debts of 477 billion yen in June, down 11.6 percent from the previous month, as the number of large failures dropped.

Japanese companies have been badly hurt by recession in major markets including the United States, Europe and Japan.

Source: AFP

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