The Bank of Japan (BOJ)’s Tankan survey reports the difference between the percentage of companies that see current business conditions as favourable and those that do not.

A positive figure means more businesses are optimistic. Friday’s headline reading among large manufacturers was plus 14, up from plus 13 in the previous three months.

For large non-manufacturers in the world’s fourth-largest economy, the index edged down to plus 33 from plus 34.

“The mediocre increase in business conditions across all firm sizes in the latest Tankan suggests that (economic) activity is unlikely to rebound meaningfully this quarter,” said Toh Au Yu of Capital Economics.

Japan’s economic growth slowed between July and September, partly because of one of the fiercest typhoons in decades and warnings of a major earthquake, which did not materialise.

The reading came the day after an extra budget worth nearly ¥14 trillion (US$90 billion) to help pay for a massive economic stimulus package passed parliament’s lower house.

Prime Minister Shigeru Ishiba is hoping the funds will lift the economy but also boost his popularity after the ruling coalition’s worst election result in 15 years.

Eyes are also on the BOJ’s next policy meeting, which concludes on Thursday.

Analysts are divided on whether the institution will raise interest rates for the third time this year as it gradually moves away from its long-standing ultra-loose policies.