Business sentiment among major Japanese companies in the April-June period was negative for the second consecutive quarter as Russia's invasion of Ukraine drove oil prices higher, government data showed Monday.

The confidence index covering firms capitalized at 1 billion yen ($7.4 million) or more logged minus 0.9, compared with minus 7.5 in the January-March period, dragged down by a plunge in auto-related manufacturers at minus 25.4, according to the joint survey by the Finance Ministry and Cabinet Office.

The sector was hit by a decrease in production due to parts supply shortages.

The figures are calculated by subtracting the percentage of firms reporting worsening conditions from those observing improvements.

The index for manufacturers stood at minus 9.9, compared with minus 7.6 in the previous quarter, while the index for nonmanufacturers swung back to plus 3.4 from minus 7.4.

Among nonmanufacturers, the transport and services sectors observed a return of customers compared with the worst stage of the coronavirus pandemic.

Business sentiment among smaller firms capitalized at 100 million yen or more but less than 1 billion yen also remained negative at minus 2.1, compared with minus 9.6 in the previous quarter.

That of corporations capitalized at 10 million yen or more but less than 100 million yen stood at minus 14.8, compared with minus 26.2.

"While the impact of the pandemic has eased, supply limitations and rising raw material prices led to overall negative sentiment," a ministry official said.

Looking forward, the index forecasting business conditions for large firms in the three months through September was plus 6.3, and that for the following quarter stood at plus 6.4.

That of firms with capital of 100 million yen or more but less than 1 billion yen logged plus 6.2 for the July-September period, and plus 8.1 for the following quarter.

That of firms capitalized at 10 million yen or more but less than 100 million yen stood at minus 3.3 for the July-September period and minus 1.7 for the following quarter.

Investment in plant and equipment among all industries is expected to increase 16.0 percent in fiscal 2022 from a year earlier, the sharpest rise since the government started the survey in 2004.

The increase was attributable to a wave of electrification of cars and the resumption of investment by retailers and wholesalers.

The survey covered 911,098 companies capitalized at 10 million yen or more, with about 11,000 firms responding by May 15.