Mumbai, Feb. 26 -- Japan's economic momentum showed fresh signs of strain at the end of 2025, with the coincident index easing to 114.3 in December-its weakest reading since August-highlighting mounting pressure on factory output, employment, and retail activity, particularly in the auto sector amid U.S. trade headwinds. Even so, the broader recovery remains intact, underpinned by Prime Minister Sanae Takaichi's wide-ranging fiscal package announced in November, aimed at easing household costs, supporting growth, and offsetting price pressures. On the monetary side, the Bank of Japan continued its cautious policy normalization by lifting the key short-term rate by 25 basis points to 0.75% in December, the second increase this year.
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