FX.co ★ Japan Coincident Index Little Changed in May

In May 2025, Japan's index of coincident economic indicators, which encompasses metrics such as factory output, employment, and retail sales, experienced a slight decrease to 115.9 from 116.0 in April, as per a preliminary report. This decline occurred during Japan's ongoing moderate economic recovery, despite ongoing uncertainties related to U.S. trade policies and persistent inflationary pressures. Notably, escalating rice prices have continued to strain household budgets, in spite of government initiatives designed to alleviate these costs. While industrial production remained stable throughout the month, the employment landscape showed promising signs of improvement. On the trade front, the United States and Japan have agreed to extend their negotiations after failing to achieve a significant breakthrough. Concurrently, the Bank of Japan maintained its cautious outlook, vigilantly observing external risks and internal inflationary pressures. The Bank intends to gradually increase interest rates, while staying adaptable to evolving economic conditions.