FX.co ★ Japan Coincident Index Revised Slightly Lower

Japan's index of coincident economic indicators, which encompasses metrics such as factory output, employment, and retail sales, registered at 116.1 in January 2025. This figure was slightly revised downward from the initial estimate of 116.2 but showed an increase from the slightly adjusted 106.0 recorded in the previous month. This reading is the most elevated since September 2019, reflecting a moderate economic recovery fueled by improved employment and income conditions, alongside a broader uptick in private consumption. Corporate profits saw enhancements, while the rate of bankruptcies remained stable. Nevertheless, cost pressures persisted amidst decelerating global economies, consistently high interest rates in the US and Europe, and ongoing stagnation in China's real estate market. On the monetary policy front, the Bank of Japan raised its key short-term interest rate by 25 basis points to 0.5% in January, reaching a 17-year peak and marking its third increase following the cessation of negative interest rates in March 2024.