East Asia Econ

Japan – manufacturing upturn

Before the war, Japan's manufacturing cycle was gaining momentum. If the war is now over, then today's releases of machine orders, exports and business sentiment suggest that strengthening momentum can now become an important theme for Japan macro.

Paul Cavey

Jun 17, 2026 • 2 min read

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East Asia Today

Another round of bad economic data in China. The BOJ raised rates today, with little reaction in either equities or fx, suggesting with rates at 1% monetary policy still remains very accommodative. In Korea, rather than higher import prices, it is the rise in export prices that is more significant.

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Korea – export prices still the standout

The sharp rise in import and export prices of recent months eased in May. But that leaves export prices at the highest level since the brief spike in 2008. That brings inflation for ROW and an income boost for Korea. With spot semiconductor prices still rising, neither trend is yet exhausted.

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China – another month of weak data

I have been arguing that the underlying economy has been stabilising, with prices bottoming out before the Iran war. But stabilisation is external-led, and today's data show the domestic cycle remains a mess. That will likely become a policy issue if IP doesn't stay at an annualised run-rate of 5%