East Asia Today

What global commodity prices tell us about the outlook for upstream inflation in the region; data in China showing another fall in building materials prices, and a sharp decline in the services PMI; decent wage growth data for Japan; and in Taiwan, another fall in fx reserves in July.

Paul Cavey

Aug 5, 2026 • 3 min read

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Japan – firm wages, stronger prices

Underlying regular wage growth at a bit under 3% is probably still a touch lower than the BOJ would like. But part-time hourly wage growth is 5%, and anyway, with today's services PMI showing more sharp rises in output prices, underlying wage growth isn't the only factor that matters for inflation.

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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.

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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.