Japan Bankruptcies Hit 13-Year High as Century-Old Firms Exit

Japan recorded 5,373 corporate bankruptcies in the first half of fiscal 2026, the most for that April-to-September period in 13 years, according to Tokyo Shoko Research. The count covers companies with at least ¥10 million in debt.

Separately, Teikoku Databank found that 112 companies more than a century old failed between January and August. At that pace, the full-year total would exceed 160, breaking the record of 146 set in 2024.

Together, the two figures have fueled claims of a bankruptcy wave in Japan. The more useful question is what lies behind the 13-year high.

A rebound from a very low base

Japan’s bankruptcies reached 18,587 in fiscal 2002 and 16,146 during the 2008 financial crisis, then fell for years, hitting 5,980 in fiscal 2021, a multi-decade low. They rose to 10,505 in fiscal 2025, still less than half the 2002 level.

In other words, the current level is climbing out of a deep trough and remains far below historic peaks.

Century-old firms: small, not systemic

More than 100 failures among century-old companies sounds alarming, but the denominator matters. Teikoku Databank counts about 46,708 companies older than 100 years as of the end of 2025. The 112 failures in the first eight months of this year represent about 0.24% of that total.

By sector, manufacturing accounted for 34, followed by wholesale with 24, retail with 22 and construction with 16. Half of the failed firms had less than ¥100 million in debt, and only four owed more than ¥1 billion. Three of those four collapsed after accounting fraud or hidden debts came to light.

The exits are concentrated among small, long-established shops and factories, not a wave of large corporate collapses.

The pandemic loan repayment wall

The rebound from low levels is tied directly to pandemic-era lending. Japan’s government rolled out effectively zero-interest, zero-collateral loans, known as “zero-zero financing,” which many small and midsize firms used to survive shutdowns.

The emergency support worked, but it kept many already-weak companies alive for a few more years. As the loans came due, those firms failed in clusters.

A paper-box maker cited earlier is typical. Revenue fell from ¥2.6 billion to ¥700–800 million. The company survived on low-interest loans and subsidies, borrowed more to upgrade equipment, and never recovered. Its cash flow broke for a second time in January, and it went bankrupt about four months later.

Failure does not always mean the craft disappears

There is another side to these stories. After the paper-box maker failed, another company signed with the bankruptcy trustee to take over its production equipment, employees and technology as a package. The shop closed, but the craft stayed.

Bankruptcy statistics record the exit of a legal entity, not the disappearance of all production capacity and jobs. Japan’s small and midsize firms face long-standing problems of no successors, aging equipment and shrinking demand. Exit is part of structural adjustment. The key question is whether equipment, technology and workers move successfully to new operators.

How to read the rise

Equating a 13-year high with economic collapse ignores the statistical base and structural differences. But calling it entirely normal turnover would obscure the lingering effects of pandemic loans and the pressure on small businesses.

A more measured reading: Japan is going through an exit wave led by small and old firms. The number is rising from a historic low, the pressure is real, but it is far from early-2000s levels. What to watch next is whether bankruptcies stabilize after the repayment peak, and whether the equipment and workers that were taken over actually stay on production lines.