Japan’s coincident economic index rose to 119.5 in September 2026, up from a final 118.8 in August, when it had fallen to a three-month low, according to flash estimates. The index, which gauges current economic conditions, indicated that the impact of recent natural disasters was gradually receding, even as disruptions related to tensions in the Middle East continued.
The economy remained on a moderate recovery path, supported by improving employment and income conditions. Business investment also picked up, though companies stayed cautious about the outlook.
In monetary policy developments, the Bank of Japan raised its key short-term policy rate by 25 basis points to 1.25% in September, the highest level since April 1995, in response to persistent inflationary pressures, including elevated oil prices. The central bank also signaled the possibility of additional rate hikes, noting that overall financial conditions remained accommodative.
