Business sentiment among large Japanese manufacturers improved in March from three months earlier, with a global economic recovery and a weaker yen bolstering the country's exports, the Bank of Japan's tankan survey showed Monday.

The key index measuring confidence among companies, such as carmakers and electronics firms, stood at 12, up 2 points from the December survey. But the result was weaker than the average market forecast of 15 in a Kyodo News poll.

The report, a quarterly survey of more than 10,000 companies, is closely watched as the broadest indicator of how Japanese companies are faring.