Major Japanese manufacturers are increasingly gloomy over an outlook darkened by weakening growth both at home and overseas.
This is according to a quarterly survey from Japan's central bank.
The Bank of Japan's "tankan" index for the three months that ended in September fell to -3, a worsening from the previous quarter's -1.
Sinking exports due to feeble demand in crisis-stricken Europe and anti Japanese protests in China have reinforced the gloom among leading companies.
The index did not retreat as far as the March reading, however, which was at -4.
Japan's central bank recently extended its monetary easing, moving to spur lending and forecasting that growth would remain flat in coming weeks.
The survey showed pessimism over the prospects for both domestic and global demand given weak growth in China, the US and Europe.
Manufacturers anticipate that sentiment will remain negative in coming months, with the index forecast to stay at -3, the survey showed. Non-manufacturers likewise predicted a worsening in sentiment, to +5 from the previous +8.
The Bank of Japan surveyed 10,722 companies and about 99% responded. The index is a percentage of the companies with a positive outlook versus those who see unfavourable conditions ahead, so a minus number means there are more pessimistic companies than optimistic ones.
