The number of corporate bankruptcies fell 14.2 percent on a year-on-year basis to 8,183 cases in the six months through September, Tokyo Shoko Research Ltd. said Wednesday.
The credit research agency attributed the decline primarily to the fact that banks and the public sector kept companies on life support.
Teikoku Databank Ltd., another research agency, said bankruptcies fell 13.5 percent to 8,337 cases from a year earlier, with liabilities totaling 5.52 trillion yen, the seventh highest postwar figure.
Although signs of growth can be identified among certain large manufacturers nearing the end of restructuring initiatives, the economic situation remains bleak for smaller companies, which are resorting to risk-averse business strategies, the agencies said.
Smaller companies are resorting to short-term solutions, such as use of a state-backed special loan program in place since February.
Others, meanwhile, owe their survival to banks' reluctance to write off problem loans, according to Sakurako Tanase, senior manager at Tokyo Shoko Research's economy research laboratory.
"The actual bankruptcy levels should be on par with last year's," said Tanase. "Bankruptcies are just being postponed."
The pace of bankruptcies has slowed on a monthly basis.
According to Tokyo Shoko Research's report, September saw a 13th straight year-on-year drop to 1,212 cases.
Meanwhile, Teikoku Databank logged a ninth straight fall to 1,238 cases.
Yet the declining pace of bankruptcies is not an indication of recovery, the agencies said. Rather, the numbers merely suggest that banks are still putting off painful bad-loan disposal maneuvers.
Smaller deadbeats and so-called zombie firms continue to weigh heavily on banks' books, steadily forming an army of future bankruptcies, warned Teikoku Databank.
Meanwhile, smaller banks are running out of costs to cut, and remain a potential trigger for a financial crisis.