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Business sentiment at major companies remained negative in the January-March period but is expected to improve in the next two quarters, according to a Finance Ministry survey released Wednesday.

The ministry’s business sentiment index for firms capitalized at 1 billion yen or more worsened to minus 6.8 in the January-March period from 5.9 in the October-December quarter, logging the first deterioration in five quarters.

But the index is expected to improve to minus 0.4 in the April-June quarter and to plus 2.3 in the July-September quarter, according to the survey.

The BSI is tallied by subtracting the percentage of companies reporting deteriorated business confidence from those reporting otherwise.

The BSI for firms capitalized between 100 million yen and 1 billion yen improved to minus 13.7 in the January-March period from 15.7 in the previous quarter.

The index for major manufacturers improved to minus 1.3 in the January-March period from minus 2.5 in the previous quarter, while that for major nonmanufacturers worsened to minus 10.3 from minus 7.9.

The index for smaller companies was little changed at minus 32.7 in the January-March period from minus 32.1 in the prior quarter.

“The overall picture of business sentiment remained flat,” a ministry official said.

The survey also found that the combined sales of the surveyed firms in fiscal 2002, which ends March 31, are projected to fall 1.1 percent from the previous year, revised upward from a projected 1.2 percent fall reported in the previous survey.

The combined pretax profits are projected to increase 9 percent in the current fiscal year, compared with an earlier-projected 11.6 percent rise.

Survey questions were sent in February to 10,750 companies, and 80.6 percent of them responded.

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