That high-frequency upstream prices in China through mid-November are stable offers an important contrast with the weakness of FAI. In Taiwan, the labour market remains tight, with the unemployment rate staying at the lowest levels in over 20 years.
The FAI data point to the economy hitting a wall. But price data don't bear that out. Indeed, upstream prices show the recent stability of PPI is likely persisting. That is also true for the demand:time deposit ratio. The cycle as a whole remains both weak and messy, but there are some green shoots.
Japan is doing macro stimulus when the cycle really doesn't need it. China isn't doing any when the cycle still does. The first keeps the JPY weak. The second prevents the CNY from appreciating. Both in turn weigh on the KRW and TWD, despite substantial current account surpluses across the region.
The big releases today were Japan CPI and trade for October and November PMIs, and Korean October PPI and exports for the first 20 days of November. Also, a longer note on Korean capital flows, and an update of the detailed trade data for China shown in our interactive dashboard.
The BOJ's base case has been that tariffs would slow inflation and growth. Today's data – November flash PMIs, and October trade and CPI data – give no indication that such slowdowns are occurring.
Global factors like US rates and JPY weakness are dragging down the KRW. But there are also local drivers, particularly Korea's big buying of overseas equities. For both the NPS and households, I would expect that to slow, with the reversal likely to be sharp if global markets really sell off.
I've been busy today, so just a couple of quick comments, covering BOJ board member Koeda Junko's speech, and the further rise in Taiwan's current account surplus.
A quiet day for data today, with only machine orders in Japan and Korean IIP data for Q3. The IIP data are interesting, showing Korea's structural emergence as an international creditor. I would have expected that to put a ceiling on $KRW, but that impact really hasn't been obvious in recent months.
A longer piece looking at whether the rise in DRAM prices means Korea macro in 2026 will look like Taiwan macro in 2026. Also, household credit data in Korea (a bit slower), and more detailed October trade data for China, showing that while exports overall were weak, shipments of cars weren't.
I don't know nearly enough about tech to decide whether this is a memory supercycle. But it certainly looks like it might be, which raises the possibility that macro in Korea in 2026 could have shades of Taiwan macro in 2025.
The major releases today were Q3 GDP in Japan (weaker headline, but details ok) and fx settlement data in China (pointing to another month of capital inflows). Elsewhere, the big trend in Taiwan's FDI data remains the shift away from investing in China.
A recap of themes for the region: China's messy cycle; nominal re-acceleration in Japan; the semi cycle as upside risk in Korea; and Taiwan's growing external excesses.
China's IP and services activity were stable in October, but were over-shadowed by another big drop in FAI. That can't be entirely dismissed, even though the data aren't so reliable. In Japan, services activity continues to trend up. In Korea, import prices are rising, but so are semi export prices.
The October data are soft, but mixed: on the one hand investment terrible and property weak, on the other, output and services more stable. That probably doesn't add up to a change in policy. My idea of stabilisation does look a bit more tenuous, and would be over if upstream prices give way again.
Import prices are rising, but not by enough to think upstream inflation is about to explode. More interesting are export prices. Auto export prices aren't rebounding. By contrast, semiconductor export prices seem to be gaining upwards momentum – which is important given the rise in spot DRAM prices.
Today's releases show Japan PPI turning up, and China credit growth slowing down. Also today, my latest data visualisation tool, mapping China's provincial data. The first data covered is FAI, showing the weakest province in September to be Guangdong, which would usually be regarded as a powerhouse.
Relative to my idea that the underlying economy could be stabilising, today's monetary data for October are a little soft. In particular, both M1 growth and the M1:M2 ratio ticked down, and mortgage lending also slowed. Credit growth also dropped, but only because of less government borrowing.
The gap between import prices and PPI in the October data illustrates the sort of pent-up inflationary pressure in Japan that is likely to be exposed if the JPY remains so weak. Today's data also show a decent rise in auto export prices, but to a level that is still 6% below the pre-tariff level.
The continued fall in interest rates in the real economy shown in yesterday's monetary policy report from the PBC, another strong sentiment survey in Japan, and some thoughts on Korea in light of yesterday's minutes of the October BOK meeting and today's labour market data.
With October meeting minutes, export and labour market data, there's enough to review the outlook for Korea. I think the underlying economic picture remains consistent with more cuts. But the minutes show Board members continuing to prioritise concerns about KRW weakness and house price strength.
Some strong numbers in Japan today, both the Economy Watchers survey – which provides a good guide to the direction of the cycle – and the current account surplus, which in September was the highest in at least 25 years. Also today, Korean export data for the first ten days of November.
The sharp recovery in sentiment in the EW survey continued in October. The improvement is broad-based, affecting both corporates and households. That shows a lessening of the tariff and inflation shocks of 1H25, and should be reflected in the BOJ becoming more optimistic about the outlook.
In addition to yesterday's inflation data from China (stronger at the margin), today's update includes the summary of opinions from the BOJ's October meeting, September consumption data for Japan, and September wages for Taiwan.
The summary of the October BOJ meeting show a stronger consensus that the time is approaching for another rate hike. That is partly because concern about tariffs is fading. It is less about domestic demand: data today show consumption trending up, but still only very slowly.
Data last week showed Taiwan remaining as one of the world's major beneficiaries of AI adoption. A big question for 2026 is whether Korea joins the party. Other themes are fiscal uncertainty in Japan, and further signs of stabilisation in China's underlying cycle.
