Japan Coincident Index

Japan's index of coincident economic indicators, which tracks factory output, employment, and retail sales, increased to 116.9 in February 2025 from a final 116.1 in the previous month, flash data showed. This marked the highest reading since September 2019, supported by a moderate economic recovery amid a rebound in private consumption and business investment, modest corporate profits, and improving employment and income conditions. Exports are also expected to recover as overseas economies continue to expand, while imports are projected to rise in tandem. However, cost pressures remain, and risks tied to US trade policy have increased. On the monetary front, the Bank of Japan signaled it may consider further rate hikes if economic and inflation conditions evolve as expected. In January, the central bank raised its key short-term interest rate by 25bps to 0.5%, marking its third hike since ending negative interest rates in March 2024.