Japan corporate bankruptcies hit 13-year July high

Corporate bankruptcies in Japan reached a 13-year high for the month of July, with 1,028 cases reported—a 6.9 percent increase from the previous year. This marks the second consecutive month that failures have exceeded 1,000.

Key drivers for the surge include labor shortages and rising costs. Bankruptcies attributed to labor shortages hit a monthly record of 63, with 36 cases specifically linked to rising personnel costs, which is double the figure from a year ago. Additionally, 93 failures were attributed to inflation, driven by a weakening yen and higher crude oil prices.

Total liabilities rose 41.4 percent to 236.3 billion yen. A significant portion of this increase is attributed to the bankruptcy of Zentoshin, an Osaka-based credit card payment processor, which filed with 115.16 billion yen in liabilities.

Sector-specific data shows increases in seven of ten industries. The construction sector saw failures rise 9.8 percent, the retail industry rose 24.1 percent, and the information and communications sector jumped 62.5 percent. Small companies with liabilities under 100 million yen accounted for nearly 80 percent of all bankruptcies.