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Major businesses are expecting business conditions to improve in the July-September quarter, according to a government survey released Wednesday.

The Ministry of Economy, Trade and Industry said its survey shows the business sentiment index at 2 for the third quarter of this year, up sharply from minus 28 for the April-June quarter.

The index is calculated by subtracting the percentage of companies with pessimistic outlooks from those with optimistic ones.

The ministry also said the quarterly sales and earnings indexes exhibited a similar trend by rising from minus 23 to 12 for sales and from minus 24 to 9 for earnings.

The optimistic showings should be discounted somewhat, however, because the poll was conducted in mid-May, when Prime Minister Junichiro Koizumi’s Cabinet had just been named and national sentiment was sky high, a METI official said.

Of more importance are the dismal readings for business conditions in the current quarter, which worsened from the preceding survey for the January-March quarter, although the two surveys are incomparable in exact terms, he said.

The latest survey covered 1,744 Japanese companies, excluding financial and real estate firms, with at least 100 million yen in capital, a workforce of 50 or more, and overseas subsidiaries. The response rate was 62.9 percent.

Previously, the ministry’s quarterly survey covered 447 firms that were not as strictly defined, the official said.

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