Japan – no obstacle to more hikes

The unusually long section of analytical boxes in the BOJ's main outlook report shows that the bank has a lot on its mind. That inevitably brings nuance. However, the overall tone is clear: nominal growth remains strong, and financial conditions loose. There's no clear reason not to hike further

Paul Cavey

Nov 2, 2026 • 6 min read

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East Asia in Four Charts

China is so far the only economy showing signs of being hurt by weakening confidence in the AI trade. Data in Korea and Taiwan remain extremely strong, and the BOJ remains worried about upside risks to inflation. That said, markets are more nervous, needing clarity on energy and data centre buildout

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Last week, next week

China's nominal cycle looks to be slowing again. The rest of the region remains strong, but confidence that this strength can be retained is fraying, and will likely remain under pressure, especially if concerns over the data centre build-out and energy prices worsen again after the mid-terms.

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China – px firm, construction not

Headline official PMIs continue to closely hug the 50 threshold. I am not sure that tells us much about the economy. But two components of the PMI are useful. The ongoing slump in construction indicates no property revival. Price indicators show PPI still strong, but warn of some weakening in CPI.