Japan's coincident economic index, a measure of current conditions based on industrial production, employment and retail sales, rose to 118.5 in June 2025 from 117.9 in May. The reading exceeded the flash estimate of 118.2 and was the highest since May 2019, indicating a continued moderate recovery. Private consumption strengthened as employment and income supported household spending, while consumer sentiment stabilised. Exports also grew as imports remained subdued, although risks linked to developments in the Middle East and other global factors clouded the outlook. Fiscal policy continued to provide support after Japan approved a second consecutive record-high state budget. The Bank of Japan maintained an accommodative policy stance despite raising its short-term policy rate by 25 basis points to 1.0% in June, the highest level since September 1995.