TOKYO - BIG Japanese manufacturers grew much less pessimistic about business conditions in the three months to June compared with the previous quarter, a government survey showed, in another sign the world's No.2 economy is emerging from its worst recession in decades.

The survey bodes well for the closely watched Bank of Japan tankan survey due out next week, which is expected to rebound from a record low hit in the first quarter when factory output and exports plunged as global demand evaporated.

The business survey index (BSI) of sentiment at large manufacturers stood at minus 13.2 in April-June, compared with minus 66.0 in the previous quarter, according to a joint survey by the Ministry of Finance and the Economic and Social Research Institute, an arm of the Cabinet Office.

The BSI measures the percentage of firms that expect the business environment to improve from the previous quarter minus the percentage that expect it to worsen. -- REUTERS