Japan's leading index of business conditions rose for the sixth-straight month in October, undergirding signs of an economic recovery and possibly tilting the Bank of Japan toward a rate hike later this month.

Japan's leading index of business conditions rose to 110.0 in October, up from 108.2 in September, and striking further above the 100 mark that separates expected growth from contraction, the country's Cabinet Office reported on Friday.

The leading index is a composite of 12 different indicators, such as job offers, consumer confidence, equity values, commodity prices, and housing construction, and is intended to predict the direction of the economy.

In October, stronger machinery orders, consumer confidence, and housing construction, and Japan's rising stock market helped propel the index to a 17-month high, officials reported.

Japan's coincident economic indicator index in October also improved to 115.4 from 114.9 in September, the Cabinet Office reported.

The Bank of Japan meets next week to set interest rates. The central bank has experienced sluggish consumer spending and slow economic growth through 2025, but it also faces a consumer price index-core (CPI-core) inflation rate of 3% in October, above the bank's 2% annual target.

The October official leading business index was roughly in line with recent purchasing manager index (PMI) reports from S&P Global.

The Japan composite PMI output index, a combination of the nation's manufacturing and services sectors, rose to 52.0 in November from 51.5 in October and struck further above the 50-mark that separates growth from contraction, S&P Global reported earlier this week.