The number of corporate bankruptcies in Japan in the fiscal first half sank below 7,000 for the first time in a decade, Teikoku Databank Ltd. said Friday.
The total for the six-month period to Sept. 30 fell 17.9 percent from the first half of the previous year to 6,847, marking a third straight first-half fall, according to the private credit research agency.
The agency attributed the fall to the fact that more midsize and small firms used the government’s “safety net” lending mechanism and avoided failure.
Another contributing factor was a decline in the number of commercial transactions based on promissory notes, which resulted in a fall in financial institutions’ dishonoring of these notes.
But Teikoku Databank warned that “it is yet difficult to conclude” that the bankruptcy crisis has come to an end as a result of a sustainable recovery in Japanese companies’ business conditions.
By industry, the 21.1 percent decline in the number of construction company failures stood out. In the Kanto region centering on Tokyo, construction company failures dropped 13 percent.
Of the first-half total, 5,136 companies, or 75 percent, collapsed as a result of slump-linked factors.
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