Japan’s coincident economic index, which tracks factory output, employment, and retail sales, fell to 115.2 in November 2025 from October’s four-month peak of 115.9, according to preliminary data. Despite the decline, the index continued to signal a moderate economic recovery, supported by improvements in employment and household income. However, downside risks to the outlook were rising, particularly as the potential impact of U.S. trade policies increases uncertainty for the economy. Persistent price pressures also remained a concern, as higher living costs could weigh on private consumption. On the monetary front, the Bank of Japan left its short-term policy rate unchanged in October, keeping borrowing costs at their highest level since 2008 and extending a pause that has been in place since the rate hike in January. That said, the central bank indicated it may continue to gradually raise rates if economic activity and inflation show further progress.