Japanese Economy Booms as Index Reaches 12-Year High

Japan's leading economic index has reached its highest level since January 2014, according to preliminary estimates. The index increased to 117.9 in July 2026 from a downwardly revised 116.2 in June.

The government's record fiscal budget and comprehensive measures to ease cost-of-living pressures have contributed to the growth. This includes emergency energy support to cushion the impact of the Middle East conflict, where inflation has remained close to the BOJ's 2% target.

The unemployment rate declined to 2.4% in July, its lowest level since July 2025, indicating resilient labor market conditions. However, employment was at a four-month low, suggesting that the job market is still facing some challenges.