The number of corporate bankruptcies during the January-June period of 2004 dropped 19.3 percent from a year earlier to 7,253, underlining a continued declining trend in the number of failures, a private-sector credit research agency said Wednesday.

Combined debts left by the failed firms plunged 32.3 percent from a year earlier to 4.37 trillion yen, falling below the 5 trillion yen line in a January-June period for the first time in eight years, Teikoku Databank Ltd. said.

A reduction in dishonored bills, resulting from contractions in credit among companies and corporations' conservative management to avoid default, are among the main factors behind the decline in failures, it said in a report. It covered corporate financial ruin involving debts of 10 million yen or more.

The agency also attributed the decrease in corporate failures to enhanced public financial assistance, such as a credit guarantee system and the extended use of a revival plan.

Of the failed firms, 5,396 collapsed due to recession-linked factors, accounting for 74.4 percent of the total and marking the first drop below the 75 percent mark in six half-year periods, the agency said.

By industry, declines in the construction industry stood out with a 21.4 percent fall.

Eight listed companies went bankrupt, down from 10 a year before.

Though a number of large-scale bankruptcies occurred among golf course operators in the earlier part of the reporting period, such occurrences slowed in the latter part, it said.

In June alone, the number of failures fell 19.5 percent from a year earlier to 1,126, down for the 18th straight month, it said.

Liabilities left by the collapses totaled 369.75 billion yen, dropping below the 400 billion yen line for the first time since December 1999.