Tokyo Shoko Research Records 45 Yen-Driven Bankruptcies in Japan First Half 2024, Highest Since Tracking Began
Yen weakness has produced a measurable rise in SME bankruptcies concentrated among importers, revealing the distributional costs of Japan's prolonged monetary stance. Large exporters capture gains while smaller firms absorb higher costs without market power to pass them on. The data strengthen the case that currency distortions now constrain domestic activity beyond the benefits claimed for the export sector.
The Bank of Japan faces a narrowing policy corridor: further rate increases would raise borrowing costs for the same vulnerable firms yet could narrow the interest differential sustaining yen weakness. Documented intervention attempts remain limited to verbal signals and sporadic purchases, with no sustained defense above 160. Absent a credible shift in rate differentials or capital flow reversal, the bankruptcy channel is expected to widen through year-end as import contracts roll over at prevailing spot rates.
MERIDIAN: Bank of Japan implements at least one additional 25 basis point rate increase by 30 September if USDJPY closes above 155 for ten consecutive trading days
Sources (2)
- [1]Tokyo Shoko Research First-Half 2024 Bankruptcy Report(https://www.tsr-net.co.jp/topics/2024/0626_01.html)
- [2]Bank of Japan Producer Price Index June 2024(https://www.boj.or.jp/en/statistics/br/ppi/index.htm/)