A recent fall in Japanese corporate bankruptcies owes more to an increase in state support for struggling small companies than to economic recovery, a leading credit research group has said.
"There has been a noticeable increase in financial first aid from government-affiliated lenders and that is showing up in bankruptcy data," said Katsuyuki Kumagai, general manager of the information department at Teikoku Databank.
"Even though failures are down, that does not mean many of the weakest companies are any healthier."
Bankruptcies have fallen for 17 consecutive months, a trend many see as a sign of Japan's economic turnaround. But the suggestion that this stems mainly from public support to small businesses raises doubts about how far Japan's economic upturn has spread.
Japan's 6.1 million small companies make up about 99 per cent of its businesses, according to the ministry of public management.
