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.
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Q1 GDP was solid, but the weakness in business sentiment in April makes us feel economic momentum is incrementally weaker. The consumer survey showed price expectations remaining elevated, which fits with weekly price data showing no big slowdown in food or energy price inflation through April.
While not yet certain, it looks like the recent fall in services PPI might be bottoming. That is important for a BOJ that will want to sound more hawkish given rising $JPY.
Export volumes haven't responded to JPY weakness, but profits have. That's feeding into manufacturing sentiment, which is better than history, and better than the rest of the world. With services sentiment also strong, the BOJ can continue to argue the macro cycle is warming up.
Cyclically, China's exports are improving, but the lift doesn't look particularly strong yet. Structurally, too, recent export performance has been a little underwhelming.
A summary of what happened on East Asia Econ last week, and what to look for in the next seven days.
We estimate that sequential core CPI inflation turned negative in March. The macro backdrop suggests that should be temporary, but uncertainty about the real strength of the domestic inflation dynamic constrains the BOJ's ability to respond to the unhelpful weakness in the JPY.
The belated release of the PBC's consumer survey continues to show falling price expectations, and so hint at rising real rates.
The consensus on China has improved in recent weeks, but there's nothing in the Q1 activity release to reinforce that shift.
A summary of what happened on East Asia Econ last week, and what to look for in the next seven days.
China's monthly monetary release doesn't seem nearly as important as it once did, because a lot of the major indicators are rangebound. The one indicator that looked a bit different last month was M1, but that rebound fully reversed in March back down to just 1.1% YoY.
We think today's export data were strong, reaching an all-time high in CNY terms. If there was weakness, it was in imports. The result, obviously, is a renewed widening of the trade surplus.
The BOK today sounded confident that core is coming down, but argued that headline is more uncertain. Of course, these two measures are different, but the distinction still feels disingenuous, and gives the impression that the bank is just trying to buy a bit more time.