FX.co ★ Japan Coincident Index Revised Slightly Lower

Japan’s coincident economic index, which measures activity in areas such as factory output, employment, and retail sales, registered 116.4 in March 2026. This was slightly below the flash estimate of 116.5, but up from 116.2 in February. The latest reading signaled a modest improvement in overall economic conditions, even as risks mounted due to the conflict in the Middle East and uncertainty surrounding U.S. trade policy. Domestic demand remained solid, underpinned by steady growth in private consumption and business investment. In contrast, exports and industrial production were broadly unchanged, underscoring weaker external demand and continued caution among firms. On the monetary policy front, the Bank of Japan kept its short-term interest rate unchanged at 0.75% in March, but policymakers suggested there was scope for another rate increase if economic activity and inflation develop in line with the central bank’s forecasts.