The index on business conditions came to 2.8 at mid -sized companies capitalized at 100 m yen to less than 1bn yen, a turnaround from minus 2.4 registered in the April-June period, the Cabinet Office and the Finance Ministry said in their joint quarterly survey.
The index is compiled by subtracting the percentage of companies reporting deteriorating business conditions from the ratio of those reporting improvement.
But the July-September index for large companies fell short of the 12.2 projected in the previous survey.
The business confidence index of large companies capitalized at 1bn yen or more came to 9.6, up 2.4 points from the April-June period.
The index of small companies capitalised at 10m yen to less than 100m yen stood at minus 17.8, up from minus 23.1 marked in the previous survey.
The indices for small- and medium- sized companies also fell short of the respective previous forecasts of 8.4 point and minus 13.6, the government said.