Japan is witnessing the largest wave of bankruptcies since 2022, with the yen falling to a historic level
The Japanese yen fell today, Monday, to its lowest levels in nearly 40 years, increasing the possibility of government intervention to rescue the deteriorating currency, at a time when the Japanese corporate sector is suffering the largest quarterly wave of bankruptcies in nearly 4 years.
The yen is trading at about 162.26 yen For the dollar, it was near last week’s low of 162.84 yen, the weakest since 1986, unnerving traders after a sudden spike in buying briefly lifted the value of the currency on Thursday.
The The Japanese yen is on the radar of investors, as the threat of official intervention kept traders on their toes, although analysts doubted the ability of any move by Tokyo to provide sustained support.
Moh Seong Sim, currency strategist at OCBC Bank, said the market still faces the risks of tight monetary policy from the Federal Reserve, which is considered a negative factor for the yen. However, concerns about potential intervention have limited further weakness in the currency.
The specter of bankruptcy haunts Japanese companies
In a related context, the weakness of the Japanese currency caused it to record the highest rate Bankruptcyduring the first half of the year since 2022, highlighting the increasing economic costs of the yen’s decline.
A report issued by the company stated "Tokyo Shoko Research" Last week, 45 companies went bankrupt between January and June for this reason, an increase of more than 30% compared to the previous year.
This is the highest number since 2022, the year in which the company began counting companies that specifically cite currency weakness when filing for bankruptcy.
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