In the Bank of Japan's quarterly "tankan" survey of business sentiment, the main index for big manufacturers rose to 2 from minus 9 three months ago. The result was in line with market expectations.

The figure represents the percentage of companies saying business conditions are good minus those saying conditions are unfavorable, with 100 representing the best mood and minus 100 the worst.

The March earthquake and tsunami disrupted manufacturing supply chains nationwide, leading to critical parts shortages for sectors such as automobiles and electronics. That resulted in a sharp deterioration in confidence, which sent the main tankan index to its lowest level in more than a year.

But factories have put supply chain worries largely behind them now. Industrial production data last week showed that output had almost nearly recovered to pre-quake levels.

AP