Japan July Capacity Utilization Index Rises 0.5% MoM, Down from 4.1%

The sharp deceleration matters less than the direction: a second consecutive monthly gain keeps the index on an upward path, but the fading pace suggests the June surge was partly a rebound rather than the start of a sustained acceleration in factory activity. For macro watchers tracking Japan's industrial cycle, the question is whether this is a pause or the beginning of a stall, especially with the third quarter already underway. Whether the next reading confirms softening momentum or reverses it is the open question.