Corporate bankruptcies dropped by 6.7 percent in May from a year earlier to 1,203, posting the first year-on-year fall in 12 months, a private credit research agency said Monday.
The debts left by the failed firms contracted 1.8 percent to ¥539.88 billion, the second straight month of decline, Tokyo Shoko Research said.
The number of bankruptcies was also the smallest in the last 12 months, the agency said. The figures cover bankrupt firms with debts of ¥10 million or more.
Prefectures where failures saw a year-on-year fall numbered 25, compared with 15 where bankruptcies increased. It was the second straight month that prefectures where failures fell outnumbered those where they rose.
These positive developments "appear to have stemmed from the government's financial assistance program, including providing emergency credit guarantees" to credit-starved companies, the agency said.
The program, devised by the administration of Prime Minister Taro Aso to soften the domestic impact of the global economic downturn, is designed to help struggling firms take out commercial bank loans by offering official repayment guarantees using such venues as prefectural credit guarantee associations.
Failures of construction companies decreased 21.3 percent for the third consecutive month. But those of manufacturers jumped 13.4 percent.
The number of large-scale bankruptcies of firms with debts of ¥1 billion or more was limited to 63, the smallest seen so far this year. Among listed companies, Joint Corp. was the sole case of bankruptcy in May.