Japan’s bankruptcies up 30% in 2023, the highest increase since the economic bubble burst

According to Teikoku Databank, the number of bankruptcies during the 2023 calendar year was 8,497, over 2,000 more than the previous year. For the second year in a row, the number of bankruptcies increased from the previous year, and approached the number in 2015 (8,517). This was the highest annual increase since the burst of the bubble economy.

Total liabilities were 2,376,903 million yen. There were 18 large-scale bankruptcies of companies with debts of 10 billion yen or more, including Panasonic Liquid Crystal Display and Unizo Holdings, (14 such bankruptcies in the previous year), with total liabilities exceeding 2 trillion yen for the second consecutive year for the first time in 10 years.

During the 2022 calendar year, liabilities increased by over 100%, while bankruptcies only increased 6% year-on-year, so the jump in bankruptcies during 2023 can be easily correlated to the build up of liabilities during the year prior.

By industry, for the first time in 15 years, all seven industries saw bankruptcies increase from the previous year. The largest number was in the service industry (to 2,099 bankruptcies from 1,601 in the previous year, up 31.1%). In the retail industry (to 1,783 from 1,207, up 47.7%), the number of bankruptcies of restaurants (to 768 from 452) was up significantly by about 70% from the previous year.

By primary cause, “recession-induced bankruptcies” increased over 30% from the same period of the previous year for the first time since 2000.

By type, there were 7,986 cases of bankruptcy, the highest level in eight years since 2015 (7,985).

By size, the number of bankruptcies of companies with liabilities of less than 50 million yen exceeded 5,000, comprising almost 60% of the total.

By business history, the number of bankruptcies of start-up companies came to 2,527, exceeding 2,500 for the first time in 11 years.

By region, all nine regions exceeded the previous year’s level for the first time in 15 years. Hokkaido (to 258 from 191, up 35.1% year-on-year), Tohoku (to 443 from 348, up 27.3% year-on-year), Kanto (to 3,066 from 2,348, up 30.6% year-on-year) and Kyushu (to 708 from 504, up 40.5% year-on-year) exceeded pre-coronavirus levels.

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