Bankruptcy

As interest rates rise, firms buckle. Put July’s run of regional-bank losses beside the collapse of Zentoshin, an Osaka payment agent, and the story writes itself. It is half wrong. The Bank of Japan did raise its policy rate to 1.00% in June, the highest since 1995, but stripped of inflation the real rate is still deeply negative (Dai-ichi Life Research Institute). A rate of 1% is not, in itself, crushing borrowers. What changed is not the level of rates but the machinery that ran beneath them. ...

Few people had heard of the company that went bankrupt on 6 July. Zentoshin, a credit-card settlement agent in Osaka, was no household name. Yet it sat beneath the cash flow of restaurants and the night-time economy across Japan, working as their plumbing. Its liabilities came to about ¥125.9bn (roughly $790m), the largest corporate failure of the year and the first above ¥100bn since Drone Net in December 2025 (TDB, TSR). Its collapse pulled a scatter of regional banks down with it. ...