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Japan 05/06 bankruptcies down for 4th straight year

Written by: Staff
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TOKYO, Apr 14 (Reuters) Japanese corporate bankruptcies fell in the past business year, marking the fourth straight year of decline and their lowest level in a decade, helped by an improving economy and greater financial aid for small firms.

The number of bankruptcies in the year ended in March fell 0.1 percent to 13,170 cases, according to data from research firm Tokyo Shoko Research. It described the year as one when bankruptcies settled down.

The total amount of bankruptcy debt slid 15.7 percent to 6.1 trillion yen (.45 billion) -- the first time total debt has fallen below 7 trillion yen in 11 years, it said.

The drop in bankruptcies comes with a growing economy, which has strengthened for four straight quarters. The economy notched up 5.4 percent annualised growth in October-December, propelled higher by strong capital spending and a pick-up in exports.

The Bank of Japan has also scrapped its five-year-old super-loose monetary policy as the country looks set to emerge from years of deflation.

Tokyo Shoko said small businesses dominated the ranks of firms going under, with companies that had five employees or less accounting for 61.5 percent of failures.

Small firms in regional areas continued to show high levels of bankruptcies, underlining the growing gap with improving business conditions in major urban areas.

While the construction and service sectors showed the biggest number of bankruptcies, the financial and insurance sector accounted for the greatest jump, with bankruptcies up 92.9 percent as regulators cracked down on small foreign-exchange margin trading firms.

For March, corporate bankruptcies climbed 10 percent from the same month the previous year to 1,255 cases, the sixth consecutive month of rises, although total debt fell 17.4 percent to 513.3 billion yen.

EUTERS PV RAI1057

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