Japan sees 1,028 bankruptcies as costs squeeze small firms
Japan recorded 1,028 corporate bankruptcies in July as labour shortages, rising personnel costs and a weaker yen squeezed smaller firms.
- Japan experienced 1,028 corporate bankruptcies in July, a 6.9% increase from the previous year, marking the second consecutive month with over 1,000 cases.
- The primary causes for the failures were rising costs, including a record 63 cases attributed to labor shortages and 93 cases linked to higher prices exacerbated by a weak yen.
- Smaller businesses were disproportionately impacted, with nearly 80% of the bankrupt companies reporting liabilities of less than ¥100 million.
- The services sector had the highest number of bankruptcies at 342, while the information and communications sector saw a significant 62.5% jump in cases.
Corporate bankruptcies in Japan exceeded 1,000 in July for the second consecutive month, as labour shortages and rising costs continued to put pressure on smaller businesses.
A total of 1,028 companies went bankrupt during the month, up 6.9% from a year earlier, according to Xinhua, citing a Kyodo News report based on data from Japanese credit research firm Tokyo Shoko Research.
Total liabilities surged 41.4% year on year to about ¥236.3 billion, equivalent to approximately 49.1 billion baht, highlighting the growing financial strain on businesses facing higher operating costs.
Bankruptcies attributed to labour shortages reached a record 63 cases. Of these, 36 were linked to rising personnel costs, twice the number recorded during the same period last year.
Another 93 bankruptcies were attributed to rising prices, the highest number since 2022. A weaker yen has increased the cost of materials and raw materials, adding further pressure on companies already struggling with higher expenses.
By industry, the services sector recorded the highest number of bankruptcies, with 342 cases. Meanwhile, bankruptcies in the information and communications sector jumped 62.5%, including among software-related companies affected by the growing use of artificial intelligence.
Smaller businesses accounted for the overwhelming majority of cases, with nearly 80% of bankrupt companies reporting liabilities of less than ¥100 million, or about 20.8 million baht.
Source: Xinhua
