Bankruptcies Surge in Japan with Growing Labor Shortages and Rising Costs

Nov 12, 2024 | News On Japan

TOKYO - The number of corporate bankruptcies across Japan in October surpassed 900 cases, reaching a level not seen in 11 years.

According to Tokyo Shoko Research, there were 909 corporate bankruptcies involving liabilities of 10 million yen or more in October, a 14.6% increase from the previous year.

For October, this marks the first time since 2013 that bankruptcies have reached the 900-case level.

In total, the number of bankruptcies from January to October has reached 8,323 cases, a 17.6% rise compared to the same period last year.

On the other hand, total liabilities in October amounted to 252.9 billion yen, a 17.8% decrease from the previous year.

By industry, the "service and other industries" category had the most cases with 303, followed by construction and manufacturing.

Bankruptcies related to labor shortages, largely driven by rising personnel costs, have surged, with cumulative cases from January to October almost doubling to 244 compared to 128 in the same period last year.

With the yen's renewed depreciation since last month, rising raw material costs pose an additional threat to corporate earnings.

Tokyo Shoko Research analyzed, "The prospect of surpassing 10,000 corporate bankruptcies for the first time in 11 years is becoming a real possibility."

Source: ANN

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