TOKYO - BUSINESS confidence among big Japanese manufacturers plunged at the fastest pace in more than three decades as the economic crisis deepened, a central bank survey showed on Monday.

Confidence tumbled to minus 24 in December from minus three the previous quarter, hitting the lowest level since early 2002, according to the Bank of Japan's Tankan survey of more than 10,000 firms.

Manufacturers painted a grim outlook of business prospects, forecasting a further slump in confidence to minus 36 in March.

The index measures the percentage of firms that think business conditions are good minus those that think they are bad.

Major Japanese manufacturers expect a 24.2 per cent slump in pre-tax profits in the current financial year to March, the survey showed.

Sales are expected to edge up just 0.9 per cent from the previous year, according to the Bank of Japan's quarterly Tankan survey.

Large companies of all industries plan to trim their investment in new plants and equipment by 0.2 per cent on average this year, in marked contrast to sharp increases in corporate capital spending seen in recent years.

Japan's corporate sector has been a key driver of a recovery in Asia's largest economy following the recessions of the 1990s.

But firms are now cutting back their investment in response to the financial crisis, raising fears that the current recession will be deeper and longer than previously feared.

Japan's economy, which is officially in recession, shrank an annualised 1.8 per cent in the third quarter of 2008, much worse than initially thought, official figures showed last week. -- AFP