Fri, 03 Dec 2021

TOKYO, June 9 (Xinhua) -- Over 400 firms in Japan went bankrupt in May as the country continues to grapple with a fourth wave of COVID-19 infections with restrictions on business operations and public movement amid a third state of emergency, a credit research firm said Wednesday.

According to Teikoku Databank, 461 companies holding debts of at least 10 million yen (91,400 U.S. dollars) filed for bankruptcy in the recording period.

Compared to the same month a year earlier, the number of companies taking legal proceedings for liquidation surged 60.1 percent.

The credit research firm noted that the downside effects of Japan's third state of emergency weighed heavily on businesses in the service sector, particularly the food and beverage industry.

The country's third state of emergency initially covered Tokyo and three other prefectures from April 25 and was set to expire on May 11.

It was subsequently extended to cover 10 prefectures with the deadline extended to June 20, in a bid to curb the spread of the virus and its highly transmissible variants.

Under the emergency measures, bars and restaurants were requested to stop serving alcohol and close earlier, while workers were urged to work remotely and refrain from making unnecessary trips across prefectural lines.

"Sectors such as dining establishments and other service providers were greatly affected by the extension and expansion of the virus emergency," a government official was quoted as saying recently, regarding data showing worsening sentiment in May among firms in the service sector.

Adding to the surge in business failures, according to Teikoku Databank, was the fact that liquidation proceedings could not be accepted in May last year due to the COVID-19 outbreak.

As the state of emergency will remain in effect in numerous prefectures until June 20, more failures are expected until the country's vaccination rollout gathers steam and reduces the necessity for businesses to shutter or reduce their operations and the economy gradually normalizes, informed sources said.

More Japan News

Access More

Sign up for The Japan News

a daily newsletter full of things to discuss over drinks.and the great thing is that it's on the house!