Japan’s preliminary Coincident Index rose 1.7 points to 120.6 in July 2025 from a final 118.9 in June, marking a second consecutive monthly gain and its highest level since October 2018. The Cabinet Office maintained its baseline assessment at "showing improvement" after the three-month moving average increased 0.77 points for a seventh straight month. Semiconductor manufacturing equipment supported industrial production, investment-goods shipments and exports, while chemical shipments, including polypropylene, also contributed. The Leading Index rose 1.7 points to 117.9, its first increase in two months, reinforcing expectations that the recovery trend will continue for the time being. Weak minivehicle output, pharmaceuticals and cosmetics wholesale sales showed that conditions remain uneven. The Bank of Japan kept its short-term policy rate at 1.0% in July, while government measures to limit fuel and oil price spikes and a new fiscal policy framework provided additional economic context.