FX.co ★ Japan Coincident Index Dips to 1-1/2-Year Low

Japan's coincident economic index, which monitors essential indicators such as factory output, employment, and retail sales, decreased to 113.4 in August 2025 from 114.1 the previous month, according to preliminary data. This marks the lowest level since February 2024, reflecting ongoing cost pressures as Tokyo grappled with rising rice prices. The impact of U.S. trade policies was also becoming increasingly apparent, despite the economy continuing to recover at a moderate pace. Exports and industrial production remained largely unchanged, while elevated prices dampened private consumption due to weaker consumer sentiment. On the monetary side, the Bank of Japan maintained its short-term interest rate in July, keeping borrowing costs at their highest since 2008. Additionally, it raised its core inflation forecast for fiscal year 2025 to 2.7%, up from the 2.2% predicted in April.