FX.co ★ Japan Coincident Index Rises to 3-Month High

Japan’s coincident economic index, a composite measurement encompassing vital metrics such as factory output, employment levels, and retail sales, increased to 114.6 in September 2025, up from 112.8 in August. This rise marks the highest level since June, according to preliminary data. The reading indicates a moderate economic recovery, with the impact of U.S. trade policy notably limited to the automotive sector. Private consumption has exhibited signs of improvement, while business investment is anticipated to maintain its upward trajectory, buoyed by consistent corporate profits and labor-saving technological advancements. Meanwhile, industrial production remained stagnant despite heightened activity in the service sector, and consumer prices continued to be high. On the monetary policy front, the Bank of Japan kept its short-term interest rate unchanged in September, maintaining borrowing costs at their peak since 2008, and hinted at gradual moves towards policy normalization.