Business confidence among Japan's biggest manufacturers surged in the past three months, a closely watched central bank survey showed Monday, in the latest sign of an uptick in the world's number three economy.

In the first reading since the government and Bank of Japan embarked on a huge spending drive to spur growth, the quarterly Tankan study jumped to "plus four" from "minus eight" in the previous three months.

The result -- which removes the percentage of firms saying business conditions are good from those saying they are bad -- is the first time the survey has been in positive territory since September 2011.

Monday's news comes days after data showed Japanese factory output outperformed expectations in May, a further indication that Abe's robust economic policy -- dubbed Abenomics -- is taking hold.

The results provide a boost to Prime Minister Shinzo Abe just weeks ahead of parliamentary elections his party is expected to win, solidifying his power base.

"I don't know if I should credit this to 'Abenomics' or not, but I think the fundamentals of the Japanese economy are improving," said Taro Saito, senior economist at NLI Research Institute.

The survey, which comes ahead of a BoJ policy meeting next week, also showed firms expect to boost their capital spending by 5.5 percent in the year to March 2014, underscoring a jump in confidence among producers.

"Companies' sentiment is improving, profits are improving, so that was a plus for the index," said Mizuho Research Institute economist Haruka Kazama.

The mood at small and medium-sized manufacturers also improved, although their Tankan readings remained in negative territory, while non-manfacturing firms saw an uptick across the board.

The survey polled a total of 10,623 Japanese firms.

Japanese companies, hit hard by the 2008 financial crisis and the 2011 quake-tsunami disaster, have seen their prospects improve as Tokyo's prescription for big government spending and monetary easing helped send the value of the yen tumbling.

A weaker yen boosts Japanese exporters by making them more competitive overseas while inflating the value of repatriated foreign income.

"For 2013, there are hopes that a weaker yen will help boost exports, and that domestic demand would also be firm," Kazama told Dow Jones Newswires.

"Those bright signs are helping end that putting-off trend," she added, referring to companies holding off new investment.

On Friday, official data showed that Japan's industrial production jumped 2.0 percent in May from a month earlier, as exports to the United States and China surged on the back of the weaker yen.

The rise was the best since December 2011 and beat expectations of a 0.2 percent uptick.

Japan's economy has been given a jolt by Abe's big spending, with the Tokyo stock market one of the world's best performers this year.

However, separate figures on Friday showed consumer prices were flat in May and household spending dropped from a year earlier, underlining the hard work that still needs to be done to end years of stubborn deflation.

Consumers tend to put off purchases when prices are falling which, in turn, weighs on producers and holds back economic growth.

The BoJ in April set an ambitious target of reaching two percent inflation in as many years -- aimed at conquering deflation -- while also unveiling a huge bond-buying programme similar to that used by the US Federal Reserve.