A leading indicator of Japan's business conditions grew faster than expected in May, preliminary data released by the Cabinet Office showed Friday.

The composite leading index rose to 110.5 in May from an upwardly revised 107.7 in April and 106.2 in March.

The coincident economic index, which measures the current activity, moved up slightly to 105.9 from a revised 105.1 in April.

Meanwhile, the lagging index, a measure of firms' past performance, dropped to 108.9 in May from 109.2 in the previous month.