TOKYO: Confidence among major Japanese manufacturers has recovered further after plunging on pandemic woes to its worst level since the global financial crisis, a key survey showed Monday.

The Bank of Japan’s December Tankan business survey—a quarterly poll of about 10,000 companies—showed a reading of minus 10 among big manufacturers, after recording minus 27 in the previous survey and minus 34 in the June survey, reports AFP.

The June figure was the lowest since June 2009 when worldwide financial shocks hammered the planet’s third-largest economy.

The short-term business sentiment survey reports the difference between the percentage of firms that are upbeat and those that see conditions as unfavourable.

A negative reading means more companies are pessimistic than optimistic. It is considered to be the broadest indicator of how Japan Inc. is faring.

The latest reading comes after the government last week approved more than $700 billion in fresh stimulus to fund projects from anti-coronavirus measures to green tech, the country’s third such package this financial year.

“The sharp rebound in the Q4 Tankan supports our view that Japan’s economy will rebound relatively swiftly from the dislocation caused by the pandemic,” said Tom Learmouth, Economist at Capital Economics in a commentary.

The latest survey also comes ahead of the Bank of Japan’s two-day monetary policy meeting from Thursday, which is widely expected to keep the current monetary easing tools but also likely to extend its special measures in response to Covid-19.

“We think the BoJ will explain that the economy continues to need policy support, especially with higher uncertainty due to the arrival of a third wave of infections,” UBS economists Masamichi Adachi and Go Kurihara said in a report.

Confidence among big non-manufacturers improved to minus 5 -- against a market consensus of minus 6 -- after logging minus 12 in September.

The latest figures show a steady recovery from the low of minus 17 in June, but are still well below the March figure of plus 8.

Japan was struggling with the effects of natural disasters and a hike in consumption tax even before the pandemic crippled the global economy.

Once it hit, there were no mandatory lockdowns in the country, with the government instead asking people to stay at home—a request that was largely heeded.

But that, coupled with a shuttering of the country’s borders, battered tourism and consumer spending, with the hospitality industry hit particularly hard.