Japan – 2%...but no more?

The BOJ argues today not just that "underlying inflation" has reached 2%, but that it is expected to stay there. However, it seems clear that stability won't be achieved without some help, as its analysis also says that all the risks to prices are to the upside.

Paul Cavey

Oct 30, 2026 • 3 min read

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Korea – strong, but still unbalanced

Earnings releases and September macro data show the cycle has strong momentum. Growth is dominated by semis, and so dependent on the global cycle. However, the doubling in tax revenue in September shows one way in which the benefits of the semi cycle can start to broaden out.

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East Asia Today

Highlights of a longer note that takes stock of Japan before the BOJ meeting tomorrow, with the theme being short-term nominal strength. In China by contrast, equity market falls highlights deflationary risk. Business sentiment in Korea ticked up. Taiwan's monitoring index in September was strong.

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Japan – medium-term concerns

With both growth and inflation strengthening, it will be tough for the BOJ not to hike faster – whatever Takaichi thinks. However, back-to-back or 50bp moves are unlikely. Moreover, the peaking of property prices and sluggishness in some wage indicators point to MT headwinds.