Economic Reports: Wholesale Prices and Corporate Bankruptcies Up in May

June 13, 2007
By Ken Worsley

First, two economic reports were issued in Japan on Tuesday:

1. The Bank of Japan announced that wholesale prices rose 2.2% in May from a year earlier, for the 39th consecutive monthly increase. The BOJ attributed the rise to a hike in crude oil prices that resulted in rising raw material prices, as well as rises in the prices of nonferrous metal and global increases in steel prices. Back in April, the BOJ revised its year-on-year projected increase in wholesale prices from 2.2 percent to 2.3 percent.

On the heels of this report, Toyota and Nippon Steel have agreed to an over 10% increase in the price of steel to be used in auto parts, the first such increase in two years.

2. The number of corporate bankruptcies in Japan hit a three year high in May. According to Tokyo Shoko Research, the number of corporate bankruptcies surged to 1,310 in May, an increase of 20.9% from the year before. The increase is attributed to the large number of small and medium size firms that continue to go bust. The debts left behind by bankrupt companies fell by 48.2%, to a ten year low. Bankruptcies affected 11,347 workers in May, topping the 10,000 mark for the third straight month.

Figures from Teikoku Databank, another research agency, showed that the number of bankruptcies came to 1,016 in May, which was up 39.0% from the year before for an eighth consecutive month of increase. According to Teikoku, the combined debts of bankrupt companies decreased 49.6% from a year ago.

Filed Under Business, Economic Reports