The number of bankrupt companies in Japan has exceeded 10,000 again

On January 14, 2025, data released by Tokyo Shoko Research, a Japanese private enterprise credit investigation agency, showed that in 2024, the number of bankruptcies of Japanese companies increased for three consecutive years, with a total of 10,006 Japanese companies bankrupted, an increase of 15.1% year-on-year. This is also the first time since 2013 that the annual number of bankruptcies of Japanese companies has exceeded 10,000 again.

Throughout 2024, the high costs and labor shortages caused by the depreciation of the yen have put heavy pressure on the operation of Japanese companies. The depreciation of the yen has led to an increase in the cost of imported raw materials. At the same time, the tight labor market in Japan and the shortage of manpower have further aggravated the operating difficulties of enterprises. Data from the Tokyo Shoko Research Institute further pointed out that among the bankrupt companies in Japan in 2024, 10,004 were small and medium-sized enterprises, accounting for the vast majority of the total number of bankrupt companies. In this regard, the analysis of the Tokyo Shoko Research Institute pointed out that these small and micro enterprises mainly rely on domestic demand for their business operations. Under the impact of slow demand recovery and rising prices, it is difficult to pass on price pressure. At the same time, heavy debt burdens are also seen as reasons for the bankruptcy of small and micro enterprises.

Against this backdrop, Japan’s service industry, especially the catering industry, has been hit hard. Data show that in terms of industry distribution, the number of bankrupt companies in the “service industry and others” category, such as catering, ranks first, increasing by 13.2% in 2024 to 3,329, the first time it has exceeded 3,000 since 1990. In addition, affected by factors such as rising prices of building materials and labor shortages, the number of bankrupt companies in the construction industry increased by 13.6% to 1,924; the number of bankrupt companies in the wholesale industry increased by 26.4% to 1,214. Relatively speaking, the number of bankrupt companies in the financial insurance industry and the real estate industry has decreased.

Looking ahead to 2025, the Japanese government and international organizations such as the International Monetary Fund (IMF) generally predict that Japan’s economy will achieve positive growth in 2025, with a growth rate of between 1% and 1.2%. This will provide a good macroeconomic environment for enterprises. However, despite the improvement in the overall economic environment, small and micro enterprises in Japan may still face challenges such as slow demand recovery, rising prices, heavy debt burdens and rising labor costs. Some institutions predict that the number of bankruptcies of small and micro enterprises may continue to increase.