Core Insights - The number of bankrupt companies in Japan with liabilities exceeding 10 million yen reached 4,990 in the first half of 2025, marking a 1.19% increase from the previous year and the highest level since 2014 [1] - Various industries, including services, construction, childcare, and healthcare, are facing significant bankruptcy risks due to rising costs and economic pressures [1][2][3] Industry Analysis - In the construction sector, the number of bankruptcies in the renovation and painting industry reached 119, surpassing the figures during the 2009 financial crisis, indicating a 20-year high for the first half of the year [1] - The childcare sector saw 22 bankruptcies in the first half of 2025, a 70% increase year-on-year, with predictions of a record high for the entire year due to fierce competition and rising operational costs [2] - Home care institutions reported 45 bankruptcies, a 12.5% increase from the previous year, driven by factors such as reduced service demand and rising costs [2] - The healthcare sector experienced 21 hospital and clinic bankruptcies, a 16.6% increase, with larger institutions facing more severe financial crises due to rising operational costs and labor shortages [3] Economic Factors - High prices contributed to 343 bankruptcies in the first half of 2025, although this represents an 8.5% decrease from the previous year, maintaining a high level above 300 for three consecutive years [3] - Labor shortages led to 172 bankruptcies, the highest for the same period, with recruitment difficulties and rising labor costs being significant contributors [4] - Tax-related bankruptcies reached 77, the second highest since 2016, as companies struggled to meet tax obligations amid rising operational costs [4] - The depreciation of the yen resulted in 33 bankruptcies, with total liabilities exceeding 88.9 billion yen, eight times that of the previous year, highlighting systemic risks for small export-oriented companies [4] Overall Outlook - Japan is facing a systemic crisis characterized by high prices, labor shortages, and debt repayment peaks, particularly in critical sectors like childcare and healthcare [5] - The political instability and uncertain economic policies from the U.S. may further exacerbate the bankruptcy situation, with predictions suggesting that the total number of bankruptcies could exceed 10,000 for the year [5]