FX.co ★ Japan Coincident Index Revised Narrowly Higher

Japan's index of coincident economic indicators, which monitors crucial metrics like factory output, employment, and retail sales, registered a level of 116.0 in May 2025. This figure slightly exceeded the preliminary estimate of 115.9, remaining consistent with April's score. The recent data indicates a moderate economic recovery, though it is being challenged by uncertainties related to U.S. trade policies and persistent cost pressures. Simultaneously, industrial output demonstrated no change for the month, but there were positive indicators regarding employment conditions. The government has been actively working to mitigate the impact of rising rice prices through targeted initiatives. In terms of policy, the Bank of Japan has adopted a cautious approach, monitoring external risks and domestic inflation trends closely. The central bank has signaled its intention to incrementally increase interest rates, while underscoring the importance of maintaining flexibility to adapt to shifting economic conditions.