Japan Coincident Index Confirmed at Highest Since 2018

Japan’s coincident economic index, a key gauge of current economic conditions based on indicators including industrial production, employment and retail sales, stood at 120.6 in July 2026, matching the flash reading and reaching its highest level since October 2018. The result pointed to a solid recovery in economic activity, supported by government measures to contain fuel and oil price increases linked to Middle East tensions, alongside a new fiscal policy framework aimed at balancing growth with budget sustainability. Meanwhile, the Bank of Japan kept its short-term policy rate at 1.0% in July, its highest level since September 1995, while judging risks to economic activity to be broadly balanced.

Japan's coincident economic index, a key gauge of current economic conditions based on indicators such as industrial production, employment, and retail sales, rose to 120.6 in July 2026 from a final 118.9 in the previous month, preliminary data showed. It was the highest reading since October 2018, pointing to a solid recovery in economic activity, supported in part by government measures to curb fuel and oil price spikes amid Middle East tensions, as well as a new fiscal policy framework aimed at balancing growth with budget sustainability. Meanwhile, the Bank of Japan kept its short-term policy rate at 1.0% in July, its highest level since September 1995, while judging risks to economic activity to be broadly balanced.

Japan's coincident economic index, a key gauge of current economic conditions based on indicators such as industrial production, employment, and retail sales, stood at 118.5 in June 2025, exceeding flash data of 118.2 and marking the highest reading since May 2019. The latest result followed May's 117.9, reflecting o a continued moderate economic recovery. Private consumption improved, with employment and income conditions supporting household spending, and consumer sentiment stabilising. External demand also strengthened, as exports grew amid subdued imports, although the outlook remained uncertain due to developments in the Middle East and other global risks. Fiscal policy continued to support the economy following Japan's approval of a second consecutive record-high state budget. Meanwhile, the Bank of Japan kept an accommodative policy stance despite raising its short-term policy rate by 25bps to 1.0% in June, the highest level since September 1995.