The large manufacturers' sentiment index rose to 25 from 22 a quarter ago, according to the quarterly Tankan survey from Bank of Japan, cited by rttnews. This was the highest score since the end of 2006.

At the same time, the large non-manufacturers' sentiment indicator held steady at 23 in the fourth quarter.

However, both big manufactures and non-manufacturers forecast conditions to weaken in the next quarter. The outlook index among manufacturers came in at 19 and that in non-manufacturing at 20.

Large enterprises among all sectors plan to raise their fixed investment in the year through March 2018. Fixed investment is forecast to rise 7.4 percent compared to a 2.1 percent fall for FY 2016.