Are Zombie Companies on the Brink of Collapse due to BOJ Rate Hikes?

A concerning trend is emerging in the corporate landscape of Japan as the Bank of Japan (BOJ) begins tightening its monetary policy. This shift threatens to pull the rug out from under many struggling firms, often referred to as “zombie companies”—businesses that generate just enough revenue to keep their operations afloat while failing to meet their long-term debt obligations. Recent insights suggest that we may be witnessing the beginning of a significant wave of bankruptcies among these weak entities, driven by rising interest rates.

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Japan Faces Surge in Bankruptcies: A Decade High Amid Rising Costs

In a troubling economic trend, Japan is witnessing its highest rate of corporate bankruptcies in ten years, driven primarily by escalating operational costs. This surge, marking a significant shift in the nation’s financial landscape, reflects broader challenges faced by businesses as they grapple with the pressures of inflation and increasing expenses.

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