Corporate bankruptcies numbered 1,384 in July, down 23.7 percent year-on-year for the seventh consecutive monthly decline, a private credit-research agency said Thursday.
The total was below 1,400 for the second month in a row.
The failed businesses left liabilities totaling 700.81 billion yen, down 41.8 percent from a year earlier and standing below 1 trillion yen for the fourth straight month, Teikoku Databank Ltd. said.
There were no large bankruptcies with debts of 100 billion yen or more in July. The report covered corporate failures involving debts of at least 10 million yen.
Teikoku Databank attributed the downtrend to the progress in restructuring efforts by companies, which have strengthened their financial health, improved profit structures and tightened risk-management procedures.
Public-sector bailouts also saved a number of struggling companies from going under, at least temporarily. But Teikoku Databank warned that the number of firms on the verge of collapse is rising because the bailouts have simply extended the life span of many small and midsize companies.
"A slump in deals among corporations amid a severe credit crunch and the failure of intermediary financial functions is surely under way, and the number of companies on the verge of collapse has been swelling under the surface," it said.
Of the total bankruptcies, manufacturers accounted for 215, retailers 187, transportation and telecommunications firms 46, and service-oriented businesses 143. Each was the lowest this year on a monthly basis.
Three listed companies went belly-up in July: medical equipment maker Colin Corp., footwear manufacturer Secaicho Corp. and consumer electronics retailer Matsumoto Denki Co.
Colin and Matsumoto Denki had been listed on the Jasdaq over-the-counter stock market; Secaicho was on the first section of the Osaka Securities Exchange.
A record 79.3 percent, or 1,098, of July's bankruptcies were caused by the recession.