Japan April-Sept. Biz Failures Hit 12-Year High

Tokyo, Oct. 8 (Jiji Press)–The number of corporate bankruptcies involving liabilities of 10 million yen or more in Japan in April-September hit the highest level in 12 years, partly due to labor shortages, Tokyo Shoko Research Ltd. said Wednesday. In the first half of fiscal 2025, business failures rose 1.5 pct from a year earlier to 5,172, up for the fourth consecutive year. The figure was close to 5,505 recorded in the same period of fiscal 2013. Meanwhile, total liabilities plummeted 49.6 pct to 692,772 million yen, following a large-scale bankruptcy in the first half of fiscal 2024. Of the total cases, 202, up 33.7 pct, were blamed on manpower shortages caused by soaring labor costs and other factors, marking the highest level for the fiscal first half since fiscal 2013, when comparable data became available. “Many companies went bust after they saw an exodus of employees due to being unable to raise wages or offer more attractive conditions than other companies,” an official of Tokyo Shoko Research said. The number of bankruptcies reflecting soaring prices also increased, by 3.9 pct to 369. By industry, the number of business failures in the services sector, including restaurant and hotel operators, climbed 4.0 pct to 1,762. The construction industry saw a 7.4 pct rise to 1,036, with higher materials prices significantly impacting cash flows. In September alone, the number of corporate bankruptcies rose 8.1 pct from a year earlier to 873, while total liabilities fell 15.2 pct to 112,470 million yen. END [Copyright The Jiji Press, Ltd.]