The number of corporate bankruptcies with liabilities of ¥10 million or more in Japan last year rose 15.1% from the previous year to 10,006, surpassing 10,000 for the first time in 11 years, Tokyo Shoko Research said Tuesday.

The annual figure marked the third consecutive year of increases as rising prices due to the yen's weakening and labor shortages caused business failures in a wide range of industries.

Meanwhile, total liabilities left by failed companies in 2024 decreased 2.4% to ¥2.3 trillion, as there was only one bankruptcy case with liabilities of ¥100 billion or more, involving MSJ Asset Management, formerly Mitsubishi Aircraft, with ¥641.3 billion. More than 70% of the failed companies had liabilities of less than ¥100 million.

By industry, business failures increased in eight of the 10 sectors surveyed. The services sector topped the list, with 3,329 bankruptcies, up 13.2% from 2023. The construction and transport industries, both facing serious hiring difficulties due to stricter overtime rules, saw their bankruptcy numbers increase 13.6% and 9.8%, respectively.

The number of bankruptcies linked to labor shortages jumped some 80% to 289, hitting a record high since the research firm began compiling such data in 2013. The number of inflation-related bankruptcies, or those caused by businesses being unable to pass on rising costs to prices, grew for the second straight year to 698.

Meanwhile, the number of failures of recipients of interest-free, unsecured loans under a program introduced during the COVID-19 pandemic fell to 567 from the previous year's 635.

In December alone, the number of corporate bankruptcies in the country rose 3.9% from a year earlier to 842.

Companies struggling to reduce debt and raise prices to reflect higher costs could face tougher management conditions amid rising interest rates. A Tokyo Shoko Research official said that inflation and labor shortages could trigger more bankruptcies in 2025.