Zombie Firms in Japan on Rise as BOJ Paves Way for Rate Hike
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One in six Japanese companies have become “zombie” firms unable to keep up with debt payments from profits alone, putting them in a vulnerable position should the central bank raise interest rates this year, as is widely expected.
The number of zombie companies hit 251,000 or 17% of the total number in the 12 months to March, jumping almost a third from the previous year, according to a report by Teikoku Databank on Friday. The number was the highest since 2011, when Japan’s economy was battered by an earthquake, tsunami and nuclear disaster, the firm said.