Bankruptcies edged down in July from a year earlier, suggesting that government measures may be helping keep businesses afloat amid the pandemic.

The number of bankruptcies fell 1.6 percent last month to 789 cases, according to data from Tokyo Shoko Research released Tuesday. Some 89 firms cited the novel coronavirus as the specific factor that drove them out of business, with restaurants and hotels hit hardest.

Bankruptcies haven’t surged in Japan during the pandemic so far. The biggest movement came in May when the number of business failures actually plunged due to the closure of courts and law offices amid a nationwide state of emergency.

While the relatively steady numbers may seem encouraging, economist Atsushi Takeda at Itochu Research Institute cautioned that more businesses could start to fail as time goes on.

"The coronavirus impact probably isn’t showing up fully yet due to government support,” Takeda said. "In reality, there are a lot of businesses in certain sectors that have hardly functioned since April and if the current situation continues, things should get tougher and tougher with each month.”

A separate Cabinet Office survey showed the outlook among Japanese merchants worsening again in July, after two months of improvement that had almost returned the index to pre-virus levels.

The Economy Watcher’s outlook index slid amid a jump in virus cases across the country in recent weeks. The Tokyo Metropolitan Government put the capital on its highest level alert last week over the spread of infections.