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Bankruptcy of companies in Japan increased by 34% in September |
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Wednesday, 08 October 2008 |
Bankruptcy of companies in Japan grew by 34 percent in September on an annual basis - the strongest pace in 8 years because of lower demand for exports and the occurrence of the credit crisis in the second largest world economy, reported Bloomberg.
The cases of bankruptcy during the month were in 1408.
The Japanese Nikkei 225 index notes during today's session the largest drop in October 1987 because of fears that the global credit crisis will prolong the stagnation of the Japanese economy. Lack of credit deprive businesses of funds, which resulted in the largest growth in the number of bankruptcy by the banking crisis in 2000 here.
"We are in recession", says Masamichi Adachi, senior economist at JPMorgan Chase in Tokyo. "Companies in the sector of real estate and construction were in a mini-bubble in recent years due to the inflow of capital from abroad. Now he stopped.
In September bankruptcy in the construction industry grew by 41 percent.
Banks reduced lending for slowing the growth of the real estate market in the country, and because of the collapse of credit markets in the U.S. due to potential buyers who refrain from acquisitions. Yet entrepreneurs are concerned about high prices of steel and other raw materials used in construction, as well as legal changes.
The credit crisis is spreading to other sectors and as the smaller companies complain of a difficult securing funding for its growth.
In bankruptcy industrial production had increased by 44 percent in transport - by 133 percent, while the financial and insurance sector - by 56 percent.
Total debt rose to 5.36 trln. yen in September, which is the second largest amount in the post-war period in the country. |
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