By Daniel Leussink

TOKYO (Reuters) - The slump in Japanese business confidence deepened in May, hitting decade lows as firms braced for a protracted period of coronavirus-driven economic weakness, the Reuters Tankan survey showed on Wednesday.

The downbeat findings came after data this week showed the world's third-largest economy slipped into its first recession in 4-1/2 years last quarter, as the broadening impact of the highly contagious virus depressed business and consumer activity at home and abroad.

The sentiment index at manufacturers slumped to minus 44 in May from minus 30 in the previous month, the lowest since June 2009, while the service-sector gauge plunged to minus 36 from minus 23, according to the Reuters Tankan poll, the worst reading since December 2009. A negative figure means pessimists outnumber optimists.

The survey showed both manufacturers and service-sector firms expected to see an even sharper fall in business sentiment in the three months ahead, at minus 51 and minus 48 in August, respectively.

"Domestic market conditions aren't stable due to the impact of the novel coronavirus," a manager at a chemicals firm wrote in the survey.

A manager at a construction firm said: "There's plenty of construction work at hand, although private capital investment is decreasing."

Prime Minister Shinzo Abe has pledged a second supplementary budget later this month, on top of the recently announced record $1.1 trillion stimulus package, to help business and households tide over the pandemic's impact.

Except for the information/communications sector, all industry categories across the manufacturing and the service sector were pessimistic about business conditions, according to the Reuters poll of 499 large- and mid-sized non-financial companies, of which 236 firms responded on condition of anonymity.

The depth of despair in the business sector reinforces analysts' expectations that Japan is on course for its worst postwar economic slump, with a Reuters poll forecasting an annualised GDP decline of 22% in the current quarter.

(Reporting by Daniel Leussink; Editing by Shri Navaratnam)