Companies turned more optimistic in December amid improved exports and firm domestic consumption, demonstrating that the economy is continuing its gradual upswing, according to the Bank of Japan's "tankan" quarterly business survey released Wednesday.

The business confidence index for large manufacturers came in at 21, up two points from three months earlier and the third straight quarter of improvement. A positive number results from confident firms outweighing their pessimistic counterparts.

Economists said China's expanding economy and the recent fall in the yen's value encouraged exports. Weakening oil prices also helped corporate sentiment.