TOKYO, April 8 (Reuters) - Japan saw corporate bankruptcy cases rise for the fourth straight year in fiscal 2025 and may see further increases from around summer this year as surging costs from the Middle East war squeeze profits, a private think tank said on Wednesday.
Total bankruptcy cases in fiscal 2025, which ended in March, stood at 10,425, up 3.5% from the previous year and exceeding the 10,000 mark for two straight years as firms struggled with rising input costs and labour shortages, Teikoku
Databank said.
The data showed companies were under strain from high input and labour costs, even before the U.S.-Israel attacks on Iran on February 28 led to an escalating conflict in the Middle East that triggered an oil price surge and supply disruptions.
"There is growing concern among firms about rising input costs as surging crude oil prices have pushed up prices not just for fuel and chemical goods, but for a wide range of items" such as plastic products, construction material and fertilisers, Teikoku Databank said.
"Japan may see a surge in bankruptcies from around summer, leading to a good chance of an increase in bankruptcy cases during fiscal 2026," it said.
The findings align with a quarterly report by the Bank of Japan's regional branch managers on Monday, which warned that surging oil costs and supply disruptions brought about by the Middle East conflict could hurt the economy.
The balance between such downside risks to growth and mounting inflationary pressure will be key to the BOJ's decision on whether to raise interest rates at its next policy meeting on April 27-28.
(Reporting by Leika Kihara; Editing by Sam Holmes)
