Japan Bankruptcies: Updated Aug. 25, 2025.

Japan bankruptcies in July hit highest for month in 2025

Article source: https://mainichi.jp/english/articles/20250808/p2g/00m/0bu/048000c

Ideas

Bankruptcies are never a good thing as people and their families are always affected. However, in economic terms it might be a leveling out of some of the markets where might be too many companies for the market. That still doesn't take away all of the pain and suffering  of a bankruptcy. 

Any time in a market which has a lot companies due to growth in the market and more companies enter the market eventually the market might become saturated with too many companies and some companies begin to see decreased sales and profits.

With that said, increased prices are not good thing and maybe the Japanese government could have found ways to help some of the companies stay in business if possible.

But then again, some might think too much interference in the governments interfering in the mechanisms of the market it being too much.

Debt involving 10 million yen or $68,000 doesn't seem like that much for a company but we don't know the exact circumstances of each case.

Perhaps the banks related to the companies were not able or unwilling to extend anymore credit and or suppliers were unable or unwilling to give them more materials as needed to stay in business.

As Japan is in a labor shortage perhaps some companies just couldn't afford to pay the wages needed to get some workers as they knew they could get better wage at other companies.

For many years many Japanese companies absorbed the increase in energy and materials costs but over time they came to a breaking point and had to eventually pass-on the higher costs to the consumer.

But some companies even after passing-on their costs their costs continued to increase and then the  labor shortage hit in Japan and they had to start paying higher wages to keep good workers and that became even more of a problem for some companies.

And yes, there could be even more bankruptcies and more and more companies are unable handle both increased costs and increase labor challenges.

Some of these companies might be considered zombie companies or the walking-dead companies that are barely existing and some might think the government might just be letting them die off but that is never the case in Japan.

Both the retail sector and the service sector have very thin profit margins and maybe they just can't handle the increased in energy and materials costs along with not being able hire more workers and their profits margins just can't handle any more costs as their profits just keep decreasing.

Again, its quite possible, and it usually is, where a market becomes very popular and more companies enter the market, such as the restaurant and food service market and then eventually there are too many in that market and some restaurants begin to see a decrease in sales and eventually a decrease in profits and then some of the companies in that market have to exit the market.

And its the same with retail stores too where too many retail stores enter the market and then there are too many and the same thing happens and the market adjusts itself by profits decreasing with some retail places and some exit the market and then the market eventually gets back to some kind of equilibrium. 

Have a nice day!