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(Bloomberg) –
Japanese bankruptcies fell in July from the previous year, suggesting that government action may simply help keep companies afloat amid the pandemic.
The number of bankruptcies fell 1.6% last month to 789 cases, according to Tokyo Shoko Research’s knowledge on Tuesday. 89 corporations cited coronavirus as the express factor that bankrupted them, and restaurants and hotels were the most affected.
Bankruptcies have not yet increased the pandemic in Japan. The most important move occurred in May, when the number of commercial bankruptcies actually decreased due to the closure of courts and law firms in a national state of emergency.
While strong numbers may seem encouraging, economist Atsushi Takeda of the Itochu Research Institute warned that more corporations can also begin to go bankrupting over time.
“The effect of coronavirus is probably not yet completely obvious because of government support,” Takeda said. “Actually, there are many corporations in some sectors that have worked slightly since April, and if the existing scenario persists, things deserve to get more and more complicated every month.
A separate survey through the Cabinet Office showed that the outlook for Japanese investors deteriorated in July, after two months of improvement that had returned the index to pre-virus levels.
Japan acted when the virus disappeared. Now it’s spreading everywhere.
Economy Watcher’s outlook rate has fallen amid an increase in virus cases nationwide in recent weeks. Last week, Tokyo’s metropolitan government placed the capital at its alert point for the spread of infections.
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