Japan’s leading economic index, which gauges the outlook for economic activity in the coming months using indicators such as job offers and consumer sentiment, increased to 118.0 in August 2026 from a marginally revised 117.6 in July, slightly below expectations of 118.1, preliminary estimates showed. It was the highest level since January 2014, supported by the government’s record fiscal budget, which included comprehensive measures to ease cost-of-living pressures and emergency energy support to cushion the impact of the Middle East conflict. However, inflation remained close to the BOJ’s 2% target. Meanwhile, the unemployment rate edged up from July’s 12-month low, while employment increased by 300,000, pointing to resilient labor market conditions. Consumer confidence weakened slightly, remaining close to a six-month high, amid households’ improved views of their income growth and employment prospects.