Over 900 Companies Declared Bankrupt in Japan in October...15% Increase Year-on-Year

In Japan, the number of companies that went bankrupt in October alone exceeded 900. It is diagnosed that bankruptcies are occurring mainly among small and medium-sized enterprises that find it difficult to reflect rising raw material costs in their selling prices. The cumulative number of corporate bankruptcies from the beginning of this year to October has also surpassed 8,300, approaching last year's annual level.

According to Tokyo Shoko Research on the 11th, corporate bankruptcies in October reached 909 cases (with debts of 10 million yen or more). This represents an increase of 14.62% compared to the same month last year and 12.63% compared to the previous month. This is the first time since 2013 that the monthly number of bankruptcies in October has exceeded 900. The total debt amount in October was 252.913 billion yen, an increase of 17.88% compared to one year ago.

Tokyo Shoko Research noted, "Bankruptcies with debts under 100 million yen accounted for 77.1%, showing the highest level this year," highlighting the rising trend of bankruptcies among small-scale companies. The Nihon Keizai Shimbun also reported, "Bankruptcies in labor-intensive industries such as the food service sector are noticeable," adding, "Although wage increases are unavoidable, companies with tight cash flow have accelerated financial deterioration, causing management to stall."

The cumulative number of corporate bankruptcies from January to October this year was 8,323, a 17.6% increase compared to the same period last year. This approaches last year's total annual bankruptcies (8,690 cases).

Recently in Japan, a wave of corporate exits has become a reality, centered on so-called 'zombie companies' that have been surviving for a long time through low-interest loans. After the Bank of Japan (BOJ) ended its negative interest rate policy, cost burdens increased, and companies unable to even cover interest payments have faced their limits. The number of corporate bankruptcies surpassed 5,000 for the first time in 10 years in the first half of this year, and it is expected to exceed 10,000 on an annual basis this year as well.

Tokyo Shoko Research forecasted, "(The number of corporate bankruptcies) is showing signs of surpassing 10,000 annually for the first time in 11 years."