East Asia Today

The main data release today was Korea July CPI, with one takeaway from that being the clear evidence of cost-push pressures from the chip boom. Elsewhere, the PBC again injected liquidity in July, Japan's monetary base contracted at a double-digit rate, and an update on Taiwan's property market.

Paul Cavey

Aug 4, 2026 • 3 min read

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Korea – cost-push more than demand-pull

The BOK expects core inflation to be pushed up by the chip boom, via both cost-push for electronic devices and demand-pull from the big boost to national incomes. In today's July data, the cost-push element is more obvious, though there are some tentative signs of demand-pull appearing.

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East Asia Today

China's RatingDog mfg PMI dipped in July, and isn't far above 50, though that's still higher than the official version. PMIs elsewhere remain better. The main driver is exports, which in Korea rose again in July. But Taiwan's non-mfg PMI is also strong, at a headline level, and for output prices.

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Japan – more inflation risks from the BOJ

The analytical boxes from the BOJ's full outlook report have three conclusions: AI won't help macro as much as headline figures suggest; but both AI and oil mean continued upside risks for inflation; and the household sector should be able to cope with rate hikes.