The outcome is worse than analysts' forecasts and stands at the lowest level observed in this indicator since April 2013, when the BoJ launched its ultra-flexible monetary policy.
The confidence index among large companies in the non-manufacturing sector also lost one point compared to the second quarter of this year, down to plus 20.
The Tankan measures the percentage of companies that say business conditions are favorable, minus those that say the opposite, and is considered an important predictor of Japan's economic growth.
The sustained decline of the indicator can be explained by the impact on the Japanese export sector of global economic uncertainty and in particular the prolonged US-China trade war.
In addition, Japan's value-added tax increased from 8 percent to 10 percent in October, a measure that has hampered domestic demand.