The number of corporate bankruptcies in Japan totaled 1,024 in July, down 8.8 percent from the previous year for the first fall below 1,100 in the month in 14 years, credit research agency Tokyo Shoko Research said Friday.

Debts left by the failed companies dropped 16.9 percent to 478.94 billion, yen falling below 500 billion yen for the month for the first time in nine years.

The agency, whose data cover business failures with liabilities of 10 million yen or more, said the government's financial support for small and midsize companies as well as business improvements in mainly major companies helped the number of bankruptcies decrease. Small-scale bankruptcies, with debts of less than 100 million, yen accounted for 63.8 percent of all insolvencies, shrinking the total debt amount.

Also on Friday, another credit research agency, Teikoku Databank, released monthly data showing the number of corporate bankruptcies in Japan sank 15.0 percent in July from the previous month to 675, and debts left by the failed firms dropped 5.0 percent to 417.42 billion yen.

The agency said the decline is a sign that corporate bankruptcies have bottomed out, adding that remarkable drops were seen in the service industry and in Osaka and neighboring prefectures.

The agency attributed the recovery trend to a pickup by digital-related firms that had performed poorly due to inventory adjustments. Also cited was an increase in sales by the retail industry thanks to the government's "Cool Biz" campaign promoting casual wear to reduce air-conditioner usage.

However, Teikoku Databank believes the improvement in business sentiment is still uncertain amid concerns about such risks as soaring crude oil prices, the Chinese yuan's exchange rate and prolonged inventory adjustments in information technology-related firms, although the government and the Bank of Japan announced Tuesday the nation's economic recovery has moved out of a lull.