Japan's listed-company count is set to fall by 58 this year to 3,778, reversing a decade of growth on the Tokyo Stock Exchange, Bloomberg reported Thursday.

The drop reflects a surge in management buyouts, M&A-related delistings and stricter capital-efficiency demands that have also cooled appetite for IPOs, according to the report.

Analysts say fewer small-cap stocks may improve market quality. Amundi Japan's Hiromi Ishihara said many global investors require market caps of around 300 billion yen, a level about 70% of Prime Market firms do not meet, the report said.

Japan's shift mirrors long-running declines in the U.S. and Germany, where listings have contracted sharply over decades. Japanese firms' average market cap has grown just 30% since 2000, far trailing global peers, according to the report.

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