The rising optimism reported by the nation's large manufacturers in the last quarter has ground to a halt, according to a key business sentiment survey released Wednesday by the Bank of Japan, fueling concerns that the nation's main engine of recovery is running out of steam.

According to the BOJ's quarterly "tankan" survey, the diffusion index -- the percentage of companies that believe business is favorable minus those that feel the opposite -- stalled at 10 percentage points for large manufacturers after rising for seven consecutive quarters.

The latest tankan shows that businesses remain cautious in the wake of November's fall in Tokyo share prices. Amid worries of a global slowdown and fears that the falls in the stock market will hurt fiscal 2000 earnings, large manufacturers' projections for March dropped 3 points to 7.