Japan Bankruptcies: Updated May 16, 2025.

Japan bankruptcies for April mark highest in 11 years

Article source: https://mainichi.jp/english/articles/20250512/p2g/00m/0bu/028000c

Ideas

Unfortunately, the Japanese economy seems to be going though a transition period where the market is maybe trying to get back to some kind of equilibrium with too many business for the current market.

It's a very sad situation but again unfortunately that is how markets work with some doing very good and some not doing so good based on demand and financial situations.

Labor shortages most likely related to companies who can hire enough workers because they can't afford to pay them with current wage increases and or they just can find workers for their business.

And then there is the inflation situation that is increasing the prices of everything including raw materials and energy.

Both manpower shortages and price increases of energy and materials compromise a company's profit margins to the point they just can't make it anymore and decide to give up.

It would be nice, if possible, if the Japanese government could help these companies, but then someone might say where is the business accountability and if a company is lazy and doesn't do things correctly who should help them.

But most likely companies don't start out to fail or try to be lazy and bad things can happen to any company that did everything correctly but still failed.

All three sectors can be explained with some degree of certainty, with restaurants losing customers due to higher inflation  and the increase of costs such a raw materials, and maybe not able to hire people as they can't afford to pay them at the rate that workers want and need these days.

The construction sector maybe is related to young Japanese people not willing to work in that sector these days as they all want to work in large name-brand companies and not construction companies, along with the increase of raw materials related to the construction industry.

The retail sector has been in a transition phase due to an increase in online shopping and if a retail shop including a small shop is not online they are losing valuable customers everyday.

Its an unfortunate situation for small and mid-size companies that can't afford to pay the wage increases that the large companies pay as their profit margins just won't allow them to pay increased wages beyond minimum wage for most small companies.

This is where, if possible, the Japanese government needs to develop programs that can help and assist small companies to survive in this difficult period in Japan.

But there are those who might say too much government interference in the market place disrupts the dynamics of a market and a market can't function correctly if there is too much government interference even government help.

It's not an easy solution when people's lives are being disrupted and Japanese families are losing everything that they try to build or create.

Try to have a nice day!