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The number of listed Japanese companies declaring bankruptcy in the 2016 financial year fell to zero for the first time since the collapse of the bubble. The zero-bankruptcy feat, which has been achieved just six times since 1964 was last achieved in 1990.
Bankruptcies among listed companies have been consistently low since the Abenomics economic revival campaign got going in 2013 – the year the Bank of Japan began its qualitative and quantitative easing programme. In February last year, the central bank introduced its negative interest rate policy, underscoring the historically low debt servicing burden on Japanese companies.
Just two bankruptcies of listed companies were logged in fiscal 2015, according to Teikoku Databank. The all-time peak of 45 was reached in 2008 at the height of the global financial crisis.
According to Tokyo Shoko Research overall bankruptcies also fell in Japan in calendar 2016 – both in terms of the number of companies (a 4.6 per cent drop to 8446) and in terms of total value (a 5.0 per cent drop to Y2trn).
But analysts point out that those figures do not tell the full story as they track only companies that have undergone court-led liquidation.
Tokyo Shoko Research survey in August last year showed that in a year where around 8,500 companies went through court led bankruptcy, a total of about 27,000 either suspended or dissolved their businesses.