Japan Biz Failures Hit 12-Year High in FY 2025

Tokyo, April 8 (Jiji Press)–The number of corporate bankruptcies with debts of at least 10 million yen in Japan in fiscal 2025, which ended last month, rose 3.5 pct from the previous year to a 12-year high, Tokyo Shoko Research Ltd. said Wednesday. The annual figure reached 10,505, up for the fourth straight year, reflecting a rise in failures among small-sized companies. Business failures linked to labor shortages or rising labor costs climbed to a record high of 442 cases. Failures stemming from inflation also increased. Bankruptcies rose in five out of the 10 sectors surveyed. In the service sector, including restaurants, the number increased 5.5 pct to 3,585, also a record high. As food and utility costs continued to rise with no sign of easing, many companies were unable to raise prices and fell into financial difficulties. The agriculture, forestry, fisheries and mining sector, along with the construction, retail and real estate industries, also recorded more business failures than the previous year. Total liabilities incurred by failed companies shrank 33.9 pct to 1,568.7 billion yen, falling to the one-trillion-yen range for the first time in four years. Of the total, cases involving liabilities of less than 100 million yen accounted for 76.7 pct, highlighting an increase in bankruptcies among small firms and micro-businesses. In March alone, the number of bankruptcies climbed 8.3 pct year on year to 924, with total liabilities increasing 16.5 pct to 114.8 billion yen. A Tokyo Shoko Research official said that inflation driven by the weak yen could “put pressure on the cash flow of small- and medium-sized enterprises with weak earnings” as the worsening situation in the Middle East starts to affect businesses. The official predicted that “corporate failures are likely to continue rising.” END [Copyright The Jiji Press, Ltd.]