East Asia Today

The PMIs continue to show no change in China's economic cycle. By contrast, the cycle in Japan is improving, and in Korea output, capex and fiscal revenue in July were all strong.

Paul Cavey

Aug 31, 2026 • 2 min read

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Korea – strong July

Output in July retained the gains of June, and capex spending rose further. Both suggest a strong start for GDP in Q3. Retail sales were weaker last month, but the household sector should start to benefit as the government spends the 20% growth in tax revenue of recent months.

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China – no change

The PMIs continue to show no economic cycle. Construction activity continues to drop, but the manufacturing PMI continues to hover around the 50 mark. Input prices have rebounded again, so this year's recovery in PPI isn't ending just yet. None of these changes point to a shift in policy.

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Last week, next week

The market themes I think are about rates v currencies. Ranking by moves in rates, the order is Korea, Japan, Taiwan then China. In currencies, by contrast, it is Korea, China, Taiwan, then Japan. That raises some interesting discrepancies.