Japan's large manufacturers' business confidence worsened in March compared to three months earlier, the Bank of Japan (BOJ) said in its Tankan survey report on Monday.

The sentiment index stood at plus 12 in the January-March period, compared with plus 19 in the previous quarterly survey.

The index for large non-manufacturers stood at plus 21, dropping from plus 24 in the previous survey.

The index measures the percentage of companies reporting favorable business conditions, minus the percentage of those reporting unfavorable conditions

The BOJ's Tankan survey is regarded as a leading indicator of Japan's economic health and serves as a guide for the central bank regarding the direction of its future monetary policy.