Japan corporate bankruptcies hit 13-year high in April-September as costs rise

Corporate bankruptcies in Japan involving debts of 10 million yen or more rose 3.9% year on year to 5,373 in the first half of fiscal 2026, covering April to September, Tokyo Shoko Research said on October 8. Tokyo Shimbun reported that prolonged price rises and soaring labour costs squeezed businesses, taking the total to its highest level in 13 years. Nishi-Nippon Shimbun also reported the 13-year high and the pressure from rising prices. Total liabilities rose 23.6% to 856.1 billion yen. [ 2 , 3 ]

Small companies made up most of the failures. Firms with fewer than 10 employees accounted for 90% of the cases, and nearly 80% of the bankruptcies involved debts of less than 100 million yen, according to Tokyo Shimbun. Bankruptcies linked to labour shortages, a chronic problem for small and medium-sized companies, rose 17.1% to 240, a record, of which 130 were attributed to soaring labour costs. Bankruptcies caused by price rises increased 17.8% to 436. [ 3 ]

Six of 10 industries recorded more bankruptcies than a year earlier. Services had the most, at 1,828, up 3.7%, followed by construction with 1,035. Tokyo Shimbun noted that a consumption tax cut on food and drink is scheduled for April 2027, and that restaurants are concerned about the impact of people eating out less. [ 3 ]

A Tokyo Shoko Research official said that as the effects of the Middle East situation and rising interest rates spread, "companies without stamina will be weeded out even further," Tokyo Shimbun reported. [ 3 ]

A day earlier, on October 7, Tokyo Shoko Research's Nagoya branch reported that bankruptcies in the nine prefectures of the Chubu region rose 8.3% to 879 in the same period, the highest first-half figure in 13 years, since 937 in fiscal 2013, according to Sankei Shimbun. Rising costs including labour weighed on firms that could not pass them on in prices, and small bankruptcies were common. Services, including restaurants, accounted for 260 cases and construction, affected by labour shortages, for 200. Total liabilities in the region rose 20.1% to 118.278 billion yen. In September alone, Chubu bankruptcies fell 11.5% to 138, the first year-on-year decline in six months, while liabilities rose 39.0% to 17.111 billion yen. [ 1 ]