East Asia Econ

East Asia Today

The strength of corporate sentiment and prices in the BOJ Tankan is significant for the policy outlook. The rise in inflation in Korea slowed in June, but cost-push and demand-pull point to core inflation remaining firm. After withdrawing liquidity in recent months, the PBC changed course in June.

Paul Cavey

Jul 2, 2026 • 2 min read

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Japan – AI boosting manufacturing

The detailed release of the Tankan confirms the message of yesterday's summary: price pressures are rising again, and momentum in the corporate sector is strong. There is some sluggishness in autos, but as in export data, that is being offset by AI demand for electronics.

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Korea – transition time for CPI

The sharp rise in inflation since March slowed in June, and the BOK expects a drop in July. But cost-push from the surge in semi prices is feeding into CPI, and the BOK also expects "expanding demand pressures" from the economic recovery to drive inflation from here.

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East Asia Today

China's RatingDog mfg PMI continues to be much stronger than the official version. Korea's PMI fell, even though June exports rose again. In the Japan Tankan, sentiment was stronger and prices up across the broad. In Taiwan, the highlight was the strength of today's non-mfg PMI.