The BoJ’s quarterly Tankan survey came in at minus four, its second consecutive quarter in negative territory and below economists’ expectations for a reading of minus one on hopes the weakening yen would spur exporters.
The figure represents the percentage of companies saying business conditions are good minus those saying conditions are bad. The survey is taken into account by the BoJ when formulating monetary policy.
The numbers, likely to spark expectations of further monetary easing by the Bank of Japan, suggest corporate managers have a cautious view of the world’s third-biggest economy.
Last month, the BoJ surprised markets by expanding its asset-purchase plan by $25 billion in a bid to kickstart growth.
In February, the bank said it would pump another 10 trillion yen ($120 billion) into markets, bringing the plan to 65 trillion yen.
In the survey released Monday, sentiment among large non-manufacturing firms improved slightly to plus five in March, compared with plus four in December.
Large manufacturers kept their outlook at minus four, unchanged from December.
Capital spending plans among big companies also remained unchanged, the survey showed, below economists’ forecasts for a slight increase.
Last week, Japan posted an unexpected 1.2 percent fall in February’s factory output after two months of growth, casting doubt on whether the economy was mounting a firm recovery.