The number of corporate bankruptcies across the country dropped 18.2 percent in August from a year earlier to 1,080, down for the 20th straight month, a private-sector corporate credit research agency said Tuesday.

Combined debts left by failed companies plunged 48.9 percent to 599.17 billion yen, remaining below 1 trillion yen for the fifth straight month, Teikoku Databank said in its monthly report on failures with debts of 10 million yen or more. The number of bankruptcies was the lowest for any month this year, the agency said, citing a significant improvement in corporate earnings, increased personal spending and capital investment as reasons for the improvement.

But the agency warned against excessive optimism, saying ailing companies, particularly small firms, have been saved from going bankrupt with the help of temporary government measures.

The fall in the number of bankruptcies also reflects a reduction in dishonoring of bills resulting from credit contraction among companies, it said.

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