Japan’s leading economic index - which reflects the outlook for the coming months based on indicators such as job offers and consumer sentiment - rose to 105.9 in July 2025, up from a downwardly revised 105.1 in June, and in line with market forecasts, according to preliminary estimates. This marked the highest level since March, driven by stronger consumer sentiment, which reached a four-month high in June. The unemployment rate held steady at 2.5%, despite a decline in total employment. Meanwhile, manufacturing activity returned to expansion in June for the first time since May 2024, supported by renewed increases in output. However, household spending eased in June, slowing from May’s surge - the fastest pace since August 2022 - reflecting the impact of persistent inflation on consumer activity.