Teikoku Databank: Japan July Bankruptcies Top 1,000 Again

KEY POINTS

• Japan corporate bankruptcies rise 8.5% in July to 1,037, topping 1,000 for a second straight month
• Total liabilities jump 40.6% to 234.1 billion yen, with Zentoshin accounting for about half
• Retail bankruptcies hit the highest July level since 2000 as inflation-linked failures reach a record 121

Corporate bankruptcies in Japan exceeded 1,000 for the second consecutive month in July 2026. Note: Japanese text in the original image from press release has been translated into English by our editorial team. (PHOTO: Teikoku Databank

Corporate bankruptcies in Japan rose to 1,037 cases in July, exceeding 1,000 for a second consecutive month for the first time since late 2009, credit research firm Teikoku Databank said on August 10.

The July total was up 8.5% from 956 a year earlier and 9 cases above June’s 1,028, marking the highest monthly count so far this year. Teikoku Databank said two straight months above 1,000 had not been recorded since November and December 2009, when the effects of the global financial crisis were still weighing on the economy.

Total liabilities from failed companies rose 40.6% from a year earlier to 234.118 billion yen ($1.48 billion), the fifth straight year-on-year increase and the largest monthly total this year. Monthly liabilities topped 200 billion yen for the first time since December 2025. The biggest failure by liabilities was Zentoshin Co, which handled early settlement services for credit card sales receivables, at 115.164 billion yen, or about half of the total.

Among the seven main industry categories, five posted increases from a year earlier. Services had the largest number of bankruptcies at 261, though that was down 0.8% from 263 a year earlier. Retail rose 27.2% to 234 cases and construction increased 14.4% to 207, both exceeding 200 cases. Retail recorded its highest July tally since 2000 began.

Within retail and related sectors, food and beverage retailers rose to 43 cases from 24 a year earlier, restaurant failures increased to 93 from 74, and food and beverage wholesalers climbed to 33 from 21. In construction, equipment installation work rose to 45 cases from 31.

By region, seven of Japan’s nine regions saw bankruptcies increase from a year earlier. Kyushu rose 16.2% to 115 cases, the second-highest July figure since 2000. Tohoku posted the fastest increase, up 57.5% to 63 cases, with all prefectures in the region exceeding year-earlier levels and the total also the second-highest for July since 2000.

Inflation-linked bankruptcies reached a record 121 cases. Bankruptcies attributed to labor shortages fell below the year-earlier level for the first time in three months, at 30 cases, while cases tied to succession difficulties rose for a second straight month to 52. Failures following so-called zero-zero loans, a Japanese term for effectively interest-free and unsecured emergency lending introduced during the COVID-19 pandemic, totaled 63, with retail accounting for 16 cases, the most among industries.

By cause, sluggish sales remained the most common driver at 840 cases, up 8.0% from a year earlier and the second-highest July total since 2000. So-called recession-type bankruptcies, which include failures linked to weak demand and deteriorating business conditions, rose 7.1% to 847 cases.

Liquidation-type bankruptcies totaled 1,003, up 9.7% from a year earlier and above 1,000 for the first time since March 2011. Of those, 951 were bankruptcies under court procedures and 52 were special liquidations. Special liquidations rose 116.7% from a year earlier to 52 cases, the second-highest level since 2000. Rehabilitation-type bankruptcies fell 19.0% to 34. Civil rehabilitation cases accounted for all of them, with 27 involving individuals and 7 involving corporations, while no corporate reorganization cases were recorded for the first time in four months.

Small-scale failures remained dominant. Bankruptcies involving individuals and companies with capital of less than 10 million yen totaled 726 cases, accounting for 70.0% of the monthly total and ranking as the second-highest monthly figure since 2000. Cases with liabilities of less than 50 million yen rose 18.7% to 655, the highest since 2000 for a second straight month. Exchange rate used for dollar conversion: USD/JPY = 158.

Source: jp.ibtimes.com