Japan – FOF trends

Q2 flow of funds: 1) firms remain net savers; 2) the fiscal deficit is under 2% of GDP, and government assets continue to rise; 3) GPIF, foreigners and households are absorbing JGB supply as the BOJ steps back; 4) household equity holdings are up sharply, but mainly because of valuations.

Paul Cavey

Sep 17, 2026 • 3 min read

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Taiwan – the fall in real rates

I expect the CBC to hike. That was also my view 3M ago, and then I was wrong, and the strong consensus is that I'll be wrong now too. Underlying my view is that the CBC can't be confident inflation has peaked. Instead, with real rates negative and the TWD weak, price pressures are likely to persist.

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East Asia Today

Machine orders and trade data for Japan confirm an upturn in the manufacturing sector. China's fx settlement data yesterday show August was another month of decent capital inflows. The renewed upturn in property prices in Taiwan is continuing.

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Japan – manufacturing upturn

Japan is now seeing the first real upswing in both manufacturing and non-manufacturing since 2017-18. Rising CPI and the JPY aren't the only factors pushing the BOJ towards hikes.