The BOJ uses machine orders as a lead for machinery investment. Data show Feb was stronger, but not by enough to lift the 3mma by much.
A summary of what happened on East Asia Econ last week, and what to look for in the next seven days.
Wage growth did slow in 2023, but that looks cyclical, not breaking the higher rate of trend growth that's been apparent since the pandemic.
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 can be increasingly confident that mortgage lending has bottomed out. But there aren't any signs of a rebound.
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.
Exports rose MoM in March, while imports were weak. Outside concern about China's trade surplus is going to intensify.
Today's Q1 BOJ consumer survey shows sentiment about income rising to the highest level in 20 years.
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.
Demographics are really having a big impact on the composition of employment.
We take a detailed look at services prices, which account for 50% of the CPI basket, and need to continue to rise if inflation is to be sustained.
Data today show Korea employment did tick down in March, but the unemployment rate remaining below 3%, the lowest since the 1990s.
Price trends in China remain range bound, with PPI falling at a 2.5%-3% YoY rate, and CPI fluctuating around 0.7%. Narrow leading indicators for inflation suggest some strengthening from here, but a real change in inflation dynamics needs a change in China's overall macro dynamics.
China should be close to an inflection in PPI, but the turn didn't happen in March. PPI fell 2.8% YoY, a rate of deflation that hasn't changed much since August 2023.
The pick-up in core CPI from late 2023 hasn't persisted, dropping back to +0.7% in March. That is consistent with the post-covid performance, and a step down from the pre-2020 average of nearly 2%.
With headline CPI still above target and the US-Korean yield gap widening, we don't think the BOK is ready to cut yet. However, the weakness of economic activity and the softening of core inflation raise the likelihood of a dissenting vote.
Data for the first 10 days of April don't show an acceleration of the mild export recovery of the last few months. That matters for the BOK when domestic demand is also weak.
The export cycle is recovering, but more in volume than value terms, and in Taiwan and China than Korea. This won't remove worries about weak consumption in Korea and China. But it likely is sufficient to keep Taiwan's economy tight, and the CBC will likely be hiking again if exports rise more.
YoY export growth did accelerate in March to almost 20%, the highest since early 2022. But in level terms, the recovery remains rather sluggish.
If there was supposed to be goods price disinflation in Japan, it didn't last long, and didn't make much difference to the level of either import or producer prices.
Even after a deep and long export recession, services inflation in Taiwan is still running at the highest rate since the late 1990s.
Data today show core CPI inflation accelerated to an annualised 3% in March. No wonder the central bank raised rates last month.
Consumer confidence for March gives reasons to think that stronger consumption will drive continued economic recovery in 2024.
The EW survey in March fell MoM, but remains well above the long-term average, and continues to point to better GDP growth.
A summary of what happened on East Asia Econ last week, and what to look for in the next seven days.