Japan bankruptcies top 10,000 in FY2025 due to price hikes, labor shortages

The number of corporate bankruptcies in Japan topped 10,000 in fiscal 2025 for the second straight year, as high prices and labor shortages weighed on small and medium-sized firms, a survey by a credit research company showed Wednesday.

Bankruptcies involving debts of at least 10 million yen rose 3.6 percent from a year earlier to 10,505, according to Tokyo Shoko Research, with firms with fewer than 10 employees accounting for around 90 percent of the total.

Total liabilities dropped 33.9 percent to 1.57 trillion yen.

Of Japan’s nine regions, seven experienced increases in bankruptcies compared to the same period a year earlier. Only the Tohoku region in the northeast and the Chugoku region in the west saw declines.

The survey showed bankruptcies attributable to high prices rose 13.9 percent to 801 cases. Those resulting from labor shortages totaled 442, with rising labor costs accounting for 195, followed by 139 due to a shortage of job applicants.

By industry, the service sector reported the highest number of bankruptcies at 3,585, up 5.5 percent, followed by construction at 2,047, with five of 10 sectors seeing increases from a year earlier.

“The disparity between firms will grow, and companies lacking funds will possibly be eliminated,” an official of the research firm said, referring to concerns over oil supply disruptions amid the Middle East war.

The credit research company also released monthly data for March, showing bankruptcies rose 8.3 percent from a year earlier to 924, marking the fourth straight monthly increase.

© KYODO