The number of corporate bankruptcies dropped 20.2 percent in May from a year earlier to 1,182, down for the 17th straight month, a corporate credit research agency said Monday.
Combined debts left by failed companies dropped 32.9 percent to 537.22 billion yen, falling below the 1 trillion yen line for the second straight month, Teikoku Databank said in its monthly report covering failures with debts of 10 million yen or more.
The decline was attributed mainly to "a reduction in dishonored bills resulting from contractions in credit among companies as well as the effect of public financial assistance being extended to small and medium-size businesses," Teikoku Databank said.
It said the recovery in leading firms -- except for builders, distributors and real estate agents -- has started to boost capital investment in the private sector, including small to midsize companies.
Teikoku Databank said the year-on-year fall of 17 straight months is the third-longest decline since the end of World War II.
But the number of failures in which firms were forced to discontinue business under court-supervised proceedings came to 470, accounting for 39.8 percent of all May bankruptcies, which set a record for the third straight month, it added.
Compared with the figure in April, there were seven fewer companies that went bankrupt in May.
By industry, failures in the construction industry showed a significant fall of 20.9 percent to 374 cases, followed by those in the wholesale industry, which dropped 22.7 percent to 187 cases.
In May, 38 companies filed for bankruptcy protection under the Civil Rehabilitation Law. It is the first time the figure has dropped below 40 since the law took effect in April 2000.
Failures of companies that had been in business for 30 years or longer numbered 318, accounting for 26.9 percent of the total.