Welcome to EAST ASIA ECON, a research service run from Taipei by Paul Cavey, and specializing in the markets and macro of China, Japan, Korea, and Taiwan.
We cover all the major data releases, as well as providing weekly and monthly summaries. We also devote a lot of time to thematic work, aiming to understand development patterns across the region, and to find common investment themes.
The analysis is founded on an on-the-ground knowledge gained from thirty years experience living, travelling and working in the region. We also have a very strong data infrastructure, built by directly accessing official sources, and made available to subscribers via a comprehensive range of interactive charts and a data app.
We don't think you'll find coverage that is as comprehensive and rounded anywhere else. The articles and charts below give a flavor of the work we are doing. There is a lot more on the home pages of the individual economies.
Signing up here will ensure you receive occassional emails that give you a taste of what we do. If you work in a financial institution and are interested in subscribing to our full service, please get in touch for a trial. Special access is also available for academics.
A summary of what happened on East Asia Econ last week, and what to look for in the next seven days.
Taiwan has the strongest cyclical picture in the region. It isn't gaining further momentum, so rate hikes aren't likely, but nor are cuts. The other big factor is Trump. He won't like either Taiwan's massive trade surplus, or its modest military spending.
The export cycle in Korea has hit a wall, but in Taiwan, there's still no slowdown. That's important, but the highlight of the December trade report was the strength of capital goods imports, which points to a strong domestic capex cycle.
Today's labour market indicators – official wage data for November, and the Q1 regional report from the BOJ – don't suggest that momentum is picking up sharply. But they do indicate that the labour market is tight, and wage growth continuing to trend up.
East Asia stands in 2025 for offering two dynamics that are distinct from the global cycle (reflation in Taiwan and Japan, deflation in China) and because the region is central to tariffs and talk of Plaza II.
After being -ve for most of 2024, core CPI saar rose in Q4. That seems unlikely to sustain, given the 2024 policy boost is fading. However, that core has picked up is at odds with the consensus interpretation of today's data, while being in line with the relative stability of PMI output prices.
Recent data and the minutes of the November BOK meeting offer a good opportunity to look at Korea in light of the latest bout of political turmoil. The conclusion: a weak cycle is getting weaker, and so exchange rate depreciation is unlikely to stop the BOK cutting further.
After a couple of weeks travelling there, and recent data and policy releases, it is clear that Japan's cycle and inflation stories are intact. That makes a Q1 BOJ hike likely, but on its own, that won't mean much for $JPY. More interesting is to ask what might get the bank to move more quickly.
A summary of what happened on East Asia Econ last week, and what to look for in the next seven days.
The CBC kept policy unchanged yesterday, and won't be in a rush to move in 2025. Growth will be slower, but the bank isn't particularly worried about either exports, or domestic demand. Optimism about consumption is partly because of expected wage hikes, which in turn will support inflation.
There was a dissenting proposal to hike today, and while the majority voted to stay on hold, Ueda suggested more clarity on wages would clear the way for rates to go up. That makes the early January meeting of BOJ regional managers important, though for the JPY, that's quite a while to wait.
The film Back to the Future came out in 1985, and with inflation in Japan, deflation in China, and big external surpluses once again, there are all sorts of regional economic themes that have echoes of then. Here's a podcast in which I discuss the implications, with links to the underlying research.