World News

Japan’s March bankruptcies rise as coronavirus halts business

TOKYO (Reuters) – Bankruptcies among Japanese companies rose for a seventh straight month in March as the coronavirus outbreak slammed the brakes on business activity across the country.

Tokyo Shoko Research, which tracks Japanese bankruptcies, said there were 740 in March, up 11.8 % from a year earlier. Among them, 12 firms went bankrupt due to the coronavirus pandemic as declines in inbound tourism hit sectors such as accommodation and restaurants, the research firm said.

That brings the total of number of business bankruptcies caused by the outbreak so far this year to 20 with another 25 in the process of filing for bankruptcy.

Japanese Prime Minister Shinzo Abe on Tuesday declared a state of emergency to fight coronavirus infections in major population centres, giving authorities more power to press people to stay at home and businesses to close.

The government also rolled out a nearly $1 trillion stimulus package to soften the economic blow, but the social distancing policies to prevent the virus spread raise worries that more firms may go into bankruptcy in coming months.

For the fiscal year ended March 2020, there were 8,631 bankruptcies, up 6.4% from the previous year and the first increase in 11 years, as a labour shortage, October’s sales tax hike and the coronavirus impact hit businesses

(Reporting by Kaori Kaneko; Editing by Sam Holmes)