Japan’s leading economic index, which forecasts economic activity in the coming months based on indicators such as job offers and consumer sentiment, was revised down to 117.7 in July 2026 from an initial estimate of 117.9, after registering 116.2 in June. Despite the downward revision, the index still marked its highest level since January 2014. The improvement was underpinned by the government’s record fiscal budget, featuring broad measures to ease cost-of-living pressures and emergency energy support to mitigate the impact of the Middle East conflict, while inflation hovered near the Bank of Japan’s 2% target.
At the same time, the unemployment rate fell to 2.4% in July, its lowest since July 2025, signaling a resilient labor market, even though overall employment slipped to a four-month low. Consumer confidence also strengthened, rising to a six-month high on the back of households’ more positive assessments of their overall economic well-being.
