The number of corporate bankruptcies in Japan rose 28.3% from a year earlier to 783 in April as smaller firms struggled to pass on higher costs stemming from rising prices to customers, credit research firm Tokyo Shoko Research has said.
It was the first time in four years for the number of bankruptcies to exceed 700 in April. The data, released Friday, covered failures involving liabilities of ¥10 million or more.
Total liabilities left by failed companies dropped 44.3% to ¥113,423 million after a large-scale bankruptcy a year earlier.
The number of bankruptcies linked to rising prices climbed 16% to 58, marking four consecutive months of increase, led by construction firms and manufacturers, sectors involving many subcontractors.
By industry, the number of bankruptcies in services was highest, at 264, up 38.2%. Wholesalers came second, with a 46.9% increase to 97, followed by transportation firms, with a 37.5% rise to 33.
The number of bankruptcies is expected to rise as companies face increased pressure from higher borrowing costs after an interest rate increase by the Bank of Japan, a Tokyo Shoko Research official said.
The central bank in March ended its negative interest rate policy and raised short-term rates for the first time in 17 years.