Bankruptcies in Japan surge in April due to rising prices
According to a survey report released by Japan's research institution "Teikoku Databank" on May 13, the number of companies going bankrupt due to soaring input costs—such as fuel and raw materials—has once again entered a rapid upward phase. With companies unable to pass on increased costs to downstream sectors, profitability has deteriorated, leading to what is known as "inflation-induced bankruptcy." In April 2026, there were 108 cases of bankruptcy directly linked to high prices—a 50% increase compared to 71 cases in the same month last year—and this monthly figure represents the highest level since records began in 2018.
The cumulative number of bankruptcies from January to April 2026 reached 346, up approximately 20% compared to 295 cases during the same period last year, potentially setting a new record.
When categorized by cause, the most common factor behind April’s bankruptcies was "raw material prices," with 63 cases accounting for 58.3% of all cases that month—an increase from 30 cases (42.3%) in April of the previous year. Since March 2025, the number of bankruptcies attributed to rising raw material prices has exceeded half of all bankruptcies (54.8%), marking the first time in 13 months that such a threshold has been surpassed.
Second was "labor costs" (24 cases, 22.2%) and "energy" (e.g., electricity and natural gas, 16 cases, 14.8%), both of which saw lower proportions compared to the same period last year.
Additionally, as of May 13, no bankruptcies have yet been confirmed specifically caused by current "naphtha supply shortages" driving up prices.
In April’s inflation-driven bankruptcies, the industry with the highest number of cases was "construction," totaling 33 (30.6%). This marks an increase of about 80% compared to 18 cases in April of the previous year, setting a new monthly record. Within the construction sector, "general contracting firms" accounted for the largest share with 20 cases. "Wood-frame construction companies" (12 cases), primarily involved in building single-family homes and apartment complexes, had the highest number of bankruptcies among wood-based construction firms since data collection began in 2018.
Furthermore, among construction-related bankruptcies driven by rising material costs, 23 cases were specifically attributed to "high raw material costs" stemming from sharp increases in steel, timber, and concrete prices—the highest number across all contributing factors.
Although the impact of rapidly worsening naphtha supply shortages remains unconfirmed, aside from the price spike in building materials triggered by wood shortages, the overlapping challenges of a shortage of young skilled workers and the retirement of older employees have led to labor shortages at job sites, causing subcontracting costs to skyrocket. As a result, some companies have fallen into bankruptcy due to rising "labor costs."
Next came "manufacturing" and "retail," each recording 20 bankruptcies. Within manufacturing, "food, feed, and beverage production" accounted for 6 cases; in retail, 10 cases were related to "restaurants."
There remains a possibility of "petroleum crisis-related bankruptcies" occurring after May.
Currently, due to the rapid deterioration of the situation in the Middle East and instability in naphtha supply, crude oil shortages are emerging, leading to significant price surges and inventory shortfalls—impacts that are already becoming evident.
Although no bankruptcies caused by naphtha supply shortages have been confirmed as of April, the uncertain outlook in the Middle East suggests prices may rise further. This effect is particularly pronounced in the transportation sector. Fuels such as diesel are critical for businesses, while construction and manufacturing heavily rely on fossil fuels and their derivatives. It is expected that after May, due to crude oil shortages and soaring petrochemical product prices, a surge in "oil shock-induced bankruptcies" is highly likely.
Original article: toutiao.com/article/1865065111243786/
Disclaimer: The views expressed in this article are those of the author alone.