The number of business failures of Japanese companies with debts of at least ¥10 million fell to a 26-year low in fiscal 2016, according to credit research agency Tokyo Shoko Research.
The agency said Monday that the number of corporate bankruptcies over the year to March 31 fell 3.5 percent from a year earlier to 8,381, down for the eighth consecutive year.
Total liabilities left by bankrupt companies declined 4.2 percent to ¥1.95 trillion, and there were no failures of publicly traded companies for the first time in 26 years, it said.
"Against the backdrop of moderate recovery in the economy, there was an increase in the amount of lending to companies with improving financial records," the agency said in explaining the decline in bankruptcies.
Bank flexibility toward debt repayment and other forms of financial support for smaller businesses also helped.
The biggest failure was Panasonic Corp. subsidiary Panasonic Plasma Display Co., which went bust in November with liabilities of ¥500 billion, the largest bankruptcy by a Japanese manufacturer in the postwar period.
Panasonic Plasma's liabilities alone accounted for a quarter of the debts left by bankrupt businesses in fiscal 2016.
Geographically, the number of corporate bankruptcies declined in six of Japan's nine regions. Business failures increased in Hokkaido, Tohoku and Chubu.
Bankruptcies rose in only three of 10 industrial sectors: agriculture, forestry, fishery and mining; service industry; and real estate industry.
For the month of March, bankruptcies declined 5.4 percent year on year to 786, with liabilities down 5.2 percent to ¥166.80 billion.
The agency said it currently sees few factors that could prompt a sharp increase in failures, but a labor shortage among smaller businesses and growing tension in international affairs could put pressure on financially distressed companies.