Business sentiment among small companies improved in the three months to June from the previous quarter, according to a survey by the government-backed Japan Finance Corp of Small and Medium Enterprise (JFSME). In the April-June quarter, the diffusion index for business conditions stood at a minus 6.8, up from minus 8.6 in the previous quarter -- the first rise in the last two quarters -- the JFSME said. In the manufacturing sector, the index was at minus 7.4, compared to minus 8.0 in the January-March period, while the index for the non-manufacturing sector stood at minus 6.6, up from minus 9.2. The quasi-governmental organization forecasts that the overall business conditions index will climb to minus 4.7 in the current quarter to September and to minus 2.1 in the following quarter. The index is computed by subtracting the percentage of companies that describe business conditions as bad from the percentage that describe conditions as good. Thus a negative number indicates that the majority consider conditions to be bad