Confidence among Japan's biggest manufacturers is at an 11-year high, a key central bank survey showed Friday, as the world's number-three economy picks up pace.

The bullish survey underscored how Japan's prospects have been improving on the back of strong exports, with investments linked to the Tokyo 2020 Olympics also giving the economy a shot in the arm.

The Bank of Japan's Tankan report, a quarterly survey of more than 10,000 companies, showed a reading of 25 among major manufacturers in its December survey, the highest since its December 2006 poll.

The mood among major manufacturers has now risen for a fifth straight quarter.

The report, seen as the broadest indicator of Japan Inc's health, marks the difference between the percentage of firms that are upbeat and those that see conditions as unfavourable.

Buoyed by a favourable outlook, the firms say they plan on average to boost capital spending by 10.2 percent year-on-year, according to the survey.