Japan bankruptcy debt rises 11 pct in April
( 2001-05-16 15:02) (7)
Japan's bankruptcy debt swelled in April to its second-highest level in the postwar era, exceeding a trillion yen ($8 billion) for the third straight month, as banks take an increasingly hard line towards ailing Japanese companies.
Total debt held by Japanese firms that failed last month rose 10.8 percent year-on-year to 1.05 trillion yen, while bankruptcy cases rose 4.4 percent to 1,631, the first year-on-year rise in two months, private research firm said on Wednesday.
Teikoku warned that the months ahead looked just as grim, with bankruptcies set to climb if the new reform-minded government of Prime Minister Junichiro Koizumi presses ahead with structural reforms in the world's second-biggest economy.
Koizumi wants banks to rid their balance sheets of non-performing loans in two to three years, a process likely to result in a slew of failures. He has also pledged to establish guidelines for corporate restructuring to deal with problems loans.
The highest-ever total of bankruptcy debt for April, 2.61 trillion yen, was posted in 1997.
Japanese banks, still burdened by a mountain of bad loans created from the bursting of an economic bubble in the early 1990s, have become increasingly cautious about extending fresh loans to firms deemed financially unstable.
Teikoku said that 1,200 bankruptcy cases, or 73.6 percent of the total for April, were caused by prolonged weakness in the nation's economy. The ratio stayed above 70 percent for the 21st straight month.
On a sector basis, the troubled construction industry once again led the way with 460 bankruptcy cases, although the total was down five percent from a year earlier. Retailing was the only other sector to see a year-on-year decline, with bankruptcy cases down 8.6 percent to 234.
The wholesale sector saw bankruptcy cases surge 12.6 percent to 313, making April the 17th consecutive month of an increase on a year-on-year basis in the sector.
April marked the first time in three months that no listed firms went bankrupt.
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