Business sentiment among major Japanese manufacturers improved for the first time since 2006, but the rebound was smaller than expected, the Bank of Japan said Wednesday.

The sentiment index for large manufacturers rose to minus 48 in June from a record low of minus 58 in March, the Bank of Japan's quarterly Tankan survey showed.

However, the index is lower than the average market forecast of minus 43 and still remained in the minus territory for the fourth quarter in a row, suggesting the economy has a bumpy road to recovery.

Large firms across all sectors plan to trim their investment in factories and equipment by 9.4 percent on average for the current fiscal year to March, the survey results showed.

The major non-manufacturers' index is expected to rise 8 points to minus 21 in the next quarter.

Despite the improvement in big companies' sentiment, small companies were more pessimistic overall, with their index covering all industries dropping 2 points to minus 49.