East Asia Econ

East Asia Today

Japan's consumers like what they are seeing of Sanae Takaichi, with another bounce in confidence in November. That removes another reason for BOJ caution. In Korea, inflation remains at around 2%, but services inflation – a better measure of domestically generated price pressures – is higher.

Paul Cavey

Dec 2, 2025 • 2 min read

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Korea – core inflation stable, but not low

The BOK says the rise in headline CPI inflation to 2.4% the last couple of months is temporary, and that core is stable. That isn't an unreasonable assessment. However, I'd continue to highlight the strength of services inflation, which remains firm reltive to ongoing labour market weakness.

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East Asia Today

The big policy event today was BOJ Governor Ueda's speech, which further increased the likelihood of a near-term hike. In terms of data, Japan released quarterly profits data (strong in non-manufacturing) and weak PMIs for the region contrasted with strong semiconductor export data for Korea.

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Region – manufacturing PMIs and Korean exports

The mfg PMIs across the region mainly remain below 50. That shows that conditions outside of semiconductors remain poor. Semi is strong, and in Korean in export data for November, are departing from a normal cycle. Goods input prices pressures are rebounding, reflecting weak currencies.