East Asia Econ

Japan – sentiment strong, prices stronger

The detailed version of the Tankan won't be released until tomorrow. But the headlines today show a clear story: business sentiment remains strong, and inflation pressures have risen yet again. The BOJ needs to become more hawkish.

Paul Cavey

Jul 1, 2026 • 2 min read

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East Asia Today

China's PMIs ticked up in June, but not by enough to dispel recent concerns about the cycle. In Japan, this year's pick-up in IP was sustained in May. The message from Korea's month-end data is a bit mixed, but there are some signs of the cycle broadening.

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Korea – broader cycle, but mixed

There are signs of a broadening of the cycle, with construction past the worst, capex rising, and the labour market bottoming. However, while services activity has been strong recently, retail sales are still sluggish, and industrial production is going sideways.

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China – not much change in PMIs

Today's official PMIs ticked up, but not by enough to clear market concern about the strength of the cycle caused by the weak IP, retail sales and FAI data of the last couple of months.