Confidence at major Japanese manufacturers fell for the third straight quarter as soaring oil prices and fears of a U.S. economic slowdown weighed on the economy, a central bank survey said Tuesday.

The central bank’s closely watched quarterly “tankan” survey showed that the index for large manufacturers’ business sentiment fell to 5 in June, down from 11 in the March survey. The figure represents the percentage of companies saying business conditions are good, minus those saying conditions are unfavorable.

The latest result was the lowest in almost five years but slightly better than market predictions for a reading of between 2 and 4. Also positive were big Japanese companies’ plans to boost capital expenditures by 2.4 percent in the fiscal year through March 2009, better than the 1.6 percent decrease they estimated in March.

The decline in confidence, however, was broad-based and hit small- and medium-size firms especially hard.

The index for large non-manufacturers fell slightly to 10 from 12 three months ago.

The index for small manufacturers tumbled to minus 10, while the small non-manufacturers’ index hit minus 20.

“High energy prices and increased uncertainty over the U.S. economy provide the major background to the weakness in sentiment,” UBS economist Akira Maekawa said in a tankan preview report. “Future business sentiment will probably remain soft, as uncertainty over the economic environment is likely to be expected to stay for a while.”

Companies expect business conditions to deteriorate further in the months ahead. The sentiment index for big manufacturers is forecast to drop to 4 in September, while the figure for large non-manufacturers will likely fall to 8, the tankan showed.

Managers also said they expect an average dollar value of 102.74 yen during the fiscal year, lower than their previous estimate of 109.21 yen.

The Bank of Japan surveyed 10,579 companies from May 28 to June 30, and 98.9 percent responded.