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    Japan’s Coincident Index declines from 115.9 to 115.2 in November

    by VT Markets
    /
    Jan 9, 2026
    The Japan coincident index dropped to 115.2 in November, down from 115.9 the month before. This decline may signal a slowdown in economic activity within the country. The coincident index is an important economic measure that shows the current state of the economy. It provides insights into overall economic performance, and watchers are keen to spot further signs of Japan’s economic growth.

    The Economic Outlook

    The fall in Japan’s coincident index to 115.2 for November 2025 confirms our belief that the economy was losing momentum late last year. This information, along with the December Tankan survey showing business confidence falling from +12 to +8, suggests that domestic activity is weakening. This trend indicates that corporate earnings might not meet expectations in the upcoming reporting season. Because of this slowdown, we think the Bank of Japan will keep its supportive monetary policy at its meeting later this month. December’s core Consumer Price Index (CPI) data, which came in at 2.2%, was lower than expected and supports the idea that the BoJ doesn’t need to tighten policies just yet. As a result, the interest rate gap between Japan and major economies like the U.S. will likely remain large. For currency traders, this strengthens the argument for holding long positions in pairs such as USD/JPY and EUR/JPY. In a similar situation back in 2022, the USD/JPY pair rose over 15%, and current conditions feel similar. The yen is expected to weaken further in the first quarter of 2026.

    Equity Market Strategy

    In the equity markets, we should be wary of the Nikkei 225. A slowing economy is a challenge for Japanese stocks, so we are thinking of buying put options on Nikkei futures to protect against a potential drop. This approach lets us benefit from a downturn while keeping our initial risk limited to the cost of the options. Create your live VT Markets account and start trading now.

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