East Asia Today

The strength in services PPI inflation in Japan is related to the Iran war and the weakness of the JPY. However, wage growth indicates more upside for PPI inflation in sectors with high labour intensity. The BOK's August survey, business sentiment in Korea continued to rise.

Paul Cavey

Aug 26, 2026 • 2 min read

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Korea – still on the up

Back-to-back rate hikes aren't common, and since July, stronger KRW and lower equities have tightened FCI. However, the economic backdrop is unusually strong, so I would still expect the BOK to hike at its August meeting. That said, rather than rates, it is the KRW that looks more interesting here.

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East Asia Today

Lots today: trade volumes and prices for July in China; underlying inflation trends in Japan; consumer confidence for August in Korea; and industrial production and retail sales in July in Taiwan.

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East Asia Today

Upstream prices in China have picked up again during August as global energy and copper prices rebounded. An unemployment rate below 3.5% in Taiwan in July shows that the labour market remains tight, in turn explaining why wage growth continues to trend up.