TOKYO (AP) — A quarterly survey by the Bank of Japan indicates manufacturers are planning to increase investment to bridge shortages in capacity as demand for exports recovers.

The central bank "tankan" released Monday showed large manufacturers judging business conditions to be improving in the world's third largest economy. A separate survey of factory purchasing managers also indicated the outlook improved in June for the 10th consecutive month.

The tankan's main index for business conditions of large manufacturers rose in the April-June quarter for the third straight quarter, from 12 to 17. Other large companies also were upbeat.

Stronger demand from China and other Asian markets is driving a recovery in exports that has stretched the capacity of some manufacturers and other employers. But forecasts suggest conditions will deteriorate in coming months.