Confidence among Japan's biggest manufacturers has risen for the third straight quarter to the best level in more than three years, a key central bank survey showed Monday as exports continue to grow.

The Bank of Japan's Tankan report -- a quarterly survey of more than 10,000 companies -- showed a reading of 17 among major manufacturers, the highest since the first quarter of 2014.

The key index, which rose from 12 in the previous survey, also beat market expectations of a result around 15.

The better-than-expected Tankan would normally be good news for Prime Minister Shinzo Abe, who has been trying to revitalise Japan's economy. But the results came a day after his Liberal Democratic Party suffered a crushing defeat in elections for the Tokyo municipal assembly.

The vote was seen as a barometer of current public sentiment toward his government which has been beset by a series of scandals that have dented its support.

Abe swept to power in late 2012 on a pledge to cement a lasting recovery in the world's third-largest economy with a growth plan eponymously dubbed Abenomics.

The scheme -- a mix of aggressive monetary easing and huge government spending along with reforms to the economy -- stoked a stock market rally as it weakened the yen and fattened corporate profits, but the effect on the wider economy has been less dramatic.