Japan's corporate bankruptcies remained elevated in July 2026, with 1,028 failures involving liabilities of ¥10 million or more, up 6.9% from a year earlier, and total liabilities of ¥236.312 billion, up 41.4% after Zentoshin's ¥115.164 billion collapse inflated the monthly total. Filings stayed above 1,000 for a second straight month for the first time in roughly 14 years, while all insolvent companies were small and medium-sized enterprises for the 17th consecutive month. Labor shortages and entrenched inflation were major drivers: labor-shortage bankruptcies hit a record 63, including 36 cases directly triggered by soaring personnel costs, and inflation-driven failures rose to 93, the highest since Tokyo Shoko Research began tracking the measure in 2022. Service businesses led with 342 bankruptcies, construction rose 9.8% to 200 in its highest reading since October 2013, and the outlook remains weak as the weak yen and higher borrowing costs add pressure on companies that cannot pass on higher costs.