Japanese bankruptcies hit an 11-year high in the 2024 fiscal year, casting a shadow over the prospect of raising interest rates by the Bank of Japan.

The credit research company Tokyo Shoko Research Institute (TSR) stated on Tuesday that the total number of bankruptcy applications in Japan for the fiscal year 2024 was 10,144, reaching the highest level in 11 years, indicating increasing uncertainty surrounding the Bank of Japan's interest rate hike schedule. According to TSR's data, in the 12 months leading up to March of this year, the number of bankruptcies in Japan was the highest since the fiscal year 2013 (10,536), increasing by 12% compared to the previous year. The data shows that, except for the finance and transportation industries, the number of bankruptcies in most industries was higher than the previous year. However, TSR stated that due to the relatively higher number of bankruptcies among small and medium-sized enterprises, the total amount of bankruptcy debts for the fiscal year 2024 was 2.37 trillion yen (160.8 billion US dollars), lower than the 2.46 trillion yen in the fiscal year 2023. TSR mentioned that the largest debtor was the former Mitsubishi Aircraft Corporation, which filed for bankruptcy last year with debts totaling 641 billion yen after terminating its commercial aircraft project. Bankruptcy data is one of the indicators used by Bank of Japan policymakers to measure the health of the Japanese economy. Bank of Japan Governor Haruhiko Kuroda has stated that if wages for companies, including small businesses, continue to rise and support consumption-led economic growth, the Bank of Japan will continue to raise interest rates.