China: the nominal stabilisation is fragile. Japan: with the cycle looking good, the risk of a BOJ upside surprise is the highest since July 2024. Korea: the upside scenario from the semi cycle still isn't the base case. Taiwan: macro becomes more interesting if the chip cycle sustains into 2026.

Regional themes: lessening deflation in China, but no sign of real recovery; the BOJ is likely to hike this month, but the JPY needs a hawkish hike; outflows into overseas equities in Korea change usual exchange rate relationships; inflation risks in Korea and Taiwan if AI chip demand is sustained

My latest video, focusing on Taiwan and Korea, and a podcast in which I discuss the outlook for the broader region.

The mfg PMIs across the region mainly remain below 50. That shows that conditions outside of semiconductors remain poor. Semi is strong, and in Korean in export data for November, are departing from a normal cycle. Goods input prices pressures are rebounding, reflecting weak currencies.

Trump's visit will dominate the news this week, particularly his trade talks with China and Korea, and whether he says anything about the JPY in Japan. It now doesn't look like the BOJ will hike on Thursday, but the tone should be more positive. The data highlight will be Korean business confidence.

Market volatility is poised to rise again. In Japan, the obvious reason is the election of Takaichi, whose Abenomics-leanings are in conflict with the ongoing firmness of inflation. In Korea and Taiwan, the trigger is US relations. China, by comparison, looks more stable.

Japan inflation indicators are mixed, so this week's Tankan survey and Ueda speech will be important. Korea's cycle is still weak, but this week's CPI data matter less when house prices have re-accelerated. Elsewhere, China's PMI will show whether nominal growth is softening again.

Wage growth, household savings and income levels are huge issues across the region. This slidepack shows how these are linked with exchange rates to lay out the outlook for currencies in China, Japan, Korea and Taiwan.

The major themes: the ending of the first stage of China's post-2020 forced structural adjustment; in Japan, peaking of inflation but BOJ still to hike; BOK cuts but inflation higher than I would have expected; expecting renewed TWD strength. I am now away for a few days, back on September 16th.