Japan Firms Squeezed by Rising Costs

The number of corporate bankruptcies in Japan hit a 13-year high for the April-September period as rising prices and labor costs squeezed smaller businesses, a credit research company said Thursday.

The number of failures, involving debts of at least 10 million yen, rose 3.9 percent from a year earlier to 5,373 cases, according to Tokyo Shoko Research.

Total liabilities left by bankrupt companies in the six-month period rose 23.6 percent to 856.1 billion yen.

Looking ahead, a Tokyo Shoko Research official warned that higher costs for crude oil and other supplies stemming from the turmoil in the Middle East, combined with rising borrowing costs following Bank of Japan interest rate hikes, would place pressure on businesses.“More companies with weak financial positions will be forced out of business,” the official said.

The conflict involving the United States, Israel and Iran has disrupted crude oil supplies and driven up energy and material costs, with Japan heavily dependent on the Middle East for its oil imports.

The BOJ raised its policy rate to 1.25 percent last month, its highest level in 31 years, as it seeks to prevent inflation from overshooting its 2 percenttarget.