Japan's business confidence at its lowest level, recovery seen by year end

Japan's business confidence plunged to its lowest level since March 2010, as the impact of earthquake and tsunami in March took its toll, the Bank of Japan today said in its quarterly Tankan survey, the central bank's quarterly economic survey of business used for formulating monetary policy. The report is released four times a year in April, July, October and mid-December.

But the survey expects conditions to improve and the economy is likely to recover towards the end of the year. The survey forecasts business sentiment among large manufacturers to rise to "plus 2" over the next quarter.

The'' tankan" survey of business sentiment shows that the main index for large manufacturers dropped to  '' minus 9'' from ''6'' in March, the first negative reading in last five quarters.

To a large extent the survey was conducted prior to the March disaster, and thus does not fully reflect the full impact of the devastation.

The survey showed index for big non-manufacturers fell to '' minus 5'' from ''plus  3''.

The confidence index for medium-sized manufacturers dropped to ''minus 12'' from ''minus 4''. The small manufacturers' index stood at ''minus 21'' from ''minus 10.