East Asia Econ

The PMI shows strong services momentum and prices charged rising "at its steepest since April 2014...reflecting another sharp rise in input costs....which was mostly linked to greater salary payments."

PSL lending, which seemed like it might become a thing for 20204, hasn't: yesterday's April data showed no new lending, so with previous loans maturing, PSL outstanding has fallen back again.

The S&P PMI shows China's services sector continues to grow at a solid rate. The outlook also remains firm, with new business growing in April by the quickest rate in almost a year.

The market focus in on real wages, but the elderly are even worse off than workers, the result of a policy of deliberately cutting pensions in real terms.

There continue to be signs that PPI inflation will turn positive in the next couple of months. That will ease an important source of investor concern.

Rather than a currency crisis, the importance of the weaker JPY for the macroeconomy is via the purchasing power of consumers. In this respect, April consumer confidence isn't too bad: down a bit, but still well up from the lows.

The PBC's Q1 urban depositor survey shows the housing market still hasn't bottomed, with price expectations falling to yet another new low in the survey's history.

The S&P PMI showed the manufacturing sector grew in April for the first time in two years. But the PMI was still only 50.2. That's not much after such a long recession – and all the excitement about AI.

Headline inflation remains around 3%. But that's because of food and energy. The trimmed mean is now at the BOK's target of 2%.

There is an export recovery, but in value terms it still doesn't look so strong, with full-month YoY growth through April struggling to get much above 10% YoY.

Q124 growth was subdued, but Taiwan must still be one of the few economies both to have grown more strongly during covid, and to have since managed to retain the gains made.

Both mfg PMIs for China were above 50 in April. There's some domestic bright spots, but the strength in the S&P PMI is all about exports.

The labour market is tight, profits are up, business sentiment is strong, and inflation is higher. The one area of weakness is consumption, and that has yet to change.

Falling prices are often used as evidence for China exporting overcapacity. But export price deflation is now easing, as the base effect of the big inflation of 2022 fades.

As has been true in Japan, consumer confidence in Taiwan remains inversely correlated with inflation expectations, implying nominal wage growth is too low.

I suppose it isn't really surprising given exports and the trade balance, but the bounce back in the manufacturing share since the early 2000s is still rather remarkable.

Inflation fell sharply in Tokyo in April. The macro story should mean some of the decline is temporary, but it complicates the more bullish story the BOJ wants to tell

The NBS's series for 10-day industrial prices 10 suggests overall PPI has stopped falling, though with big differences depending on the commodity.

The drop in services PPI inflation since late 2023 has threatened the BOJ's wage-price narrative. It is important that March data suggest a floor.

Overall consumer confidence is at the average of the last 20 years. But by age, young people are more optimistic than usual, 40-60 year olds much less so.

Unusual domestic strength got Taiwan through the '23 export recession. Exports are now recovering, but consumption is still holding up. That's good news for the economy, bad news for the central bank.

The flash services PMI remained strong in April, and the mfg PMI lifted towards 50. S&P also reported the survey showing "intensifying price pressures". Japan is heating up.

There was a bit of pick-up in IC orders in March, but not by enough to lift total orders, which have yet to regain 2023 levels. The export recovery remains sluggish.

Relative to history, business sentiment in Japan is the strongest among most major economies in both mfg and non-mfg. That's only been seen once before.

Japan's export volumes to China are still almost 20% below the peak. Nor surprising, when the only strength in China's imports is primary goods and semi.