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Corporate bankruptcies in Japan dropped to a 30-year low in fiscal 2020, which ended March 31, thanks to government relief measures for businesses hit by the coronavirus fallout, Tokyo Shoko Research Ltd. said Thursday.

The number of companies that failed with debts of ¥10 million or over fell 17.0% from the previous year to 7,163, falling short of 8,000 for the first time since fiscal 1990, the credit research firm said.

Business failures may increase among cash-strapped small and midsize companies as the pandemic is prolonged.

“Bankruptcies are being capped currently (by relief measures), and they’ll come to the surface gradually after companies lose their financial stability,” a Tokyo Shoko Research official said.

The number of business failures among restaurants and bars decreased 6.8% owing to government subsidies paid in exchange for shortening operating hours to contain the pandemic.

In the accommodation sector, the number of bankruptcies surged 71.6%, hit by a pandemic-induced slump in tourism.

In March alone, the number of corporate bankruptcies declined 14.3% from a year before to 634, down for the ninth-straight month.

Compared with February, however, the number of bankruptcies climbed 42.2 % as that of pandemic-linked failures hit a new high.

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