Japan Bankruptcies Hit Lowest Since the 1960s: What Gives?
Japan Bankruptcies Hit Lowest Since the 1960s: What Gives?
(Bloomberg) -- You’d be forgiven for assuming that Japanese bankruptcies would jump during a nationwide state of emergency that shut thousands of businesses amid the struggle to contain the coronavirus.
In fact, though, two surveys on Monday showed bankruptcy filings actually plunged in May. According to one report, from researcher Teikoku Databank, bankruptcies slid 56% to 288, the lowest monthly number since 1964. Another report from Tokyo Shoko Research showed a similar slide.
Japan has a history of reporting fewer business failures during economic crises as government comes to the rescue, but this time another bigger factor is also at play. The coronavirus has caused major delays at courts and law offices, according to Yuya Akama, a manager at Teikoku Databank.
“This is a very special situation,” he said. “During April and May, 80% of government workers and court staffers were working from home,” he said, adding the bankruptcy numbers are likely to rise in late June and July.
Earlier Monday, the coronavirus may also have played havoc with the government’s growth report for the first quarter.
Revised numbers showed the economy shrank less than initially estimated, but the figure incorporated the problematic results of a survey on business investment that was skewed by a low response rate. Firms hit hard by the pandemic may not have had the time or resources to respond to government inquiries in the usual way.
©2020 Bloomberg L.P.