09.03.202605:17:08UTC+00Japan Coincident Index Notches 11-Month Peak

Japan’s coincident economic index—which tracks factory output, employment, and retail sales—rose to 116.8 in January 2026, up from a revised 114.3 in the previous month, flash data showed. This was the highest level since February 2025, indicating a moderate improvement in overall economic activity.

The impact of recent U.S. trade policies has been felt most acutely in the automotive sector, while other parts of the economy have remained comparatively resilient. Employment and income conditions also strengthened, supporting household consumption, and business investment showed signs of recovery despite persistent cost pressures.

On the policy front, the Bank of Japan left its key short-term interest rate unchanged at 0.75% at its first meeting of 2026. In its quarterly outlook, the board raised its GDP growth forecast for fiscal 2025 to 0.9% from 0.7%, citing support from a recent trade agreement with Washington and Tokyo’s substantial stimulus package.