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Japanese Corporate Bankruptcies Remain High - 2002-10-18

The number of corporate bankruptcies in Japan remains close to a record high. Nearly 9,700 firms collapsed in the first half of the business year, according to Teikoku Databank, a research agency.

That number is down just a fraction from a year earlier. However, the research agency warns that bankruptcies continue to rise, due largely to the weak economy and deflation. Liabilities for the firms that collapsed in the first half of the year total $50 billion.

The Bank of Japan is considering new steps to tackle the country's economic woes. In line with a new government anti-deflation package, the bank may further ease monetary policy.

BOJ Governor Masaru Hayami tells reporters that if the government implements concrete economic policy measures, the BOJ will monitor the move and may consider taking complementary action.

Just what the central bank might do remains unclear, since interest rates are already close to zero. The bank has yet to release details of its plan. The BOJ announced an unprecedented decision last month to buy stock directly from Japanese banks to ensure financial system stability.

Fast Retailing, a leading casual-clothing seller in Japan, reports a drop in annual earnings that is worse than expected. The company says group net profit fell about 47-percent from last year to $250 million, and attributes the fall to worsening consumer sentiment. It is the first time Fast Retailing has posted a decline in profits since the company went public in 1994.