East Asia Econ

Japan – Himino's upside and downside risks

The content of deputy governor Himino's speech today was thoughtful and so interesting, covering both tariffs and the outlook for prices. But consistent with the ponderous tone, the conclusions weren't particularly forceful.

Paul Cavey

Sep 2, 2025 • 4 min read

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Korea – wage growth still slowing, floor should be close

The breakdown of income in the detailed Q2 GDP data shows the labour share falling, but remaining well above the pre-covid level. That implies wage growth has slowed to a bit over 2%. Bottom-up wage data for June look similar. A floor is probably close, but there's no sign of a re-acceleration yet.

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East Asia Today

The only major data release today was August inflation in Korea. The headlines moved a lot, but the underlying picture was stable. In Japan, BOJ deputy governor Himino gave an interesting speech. In China, a reminder of the drivers of deflation and how they might be changing.

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Korea – no change in underlying CPI

Two shocks affected CPI in August: bad weather that pushed food prices up, and big cuts in mobile phone bills. The latter impact was bigger. Excluding all that and core remains around 2%, and the BOK expects that to continue. I would have expected more downside risk, but there's no sign of that yet.