Japan – firm wages, stronger prices

Underlying regular wage growth at a bit under 3% is probably still a touch lower than the BOJ would like. But part-time hourly wage growth is 5%, and anyway, with today's services PMI showing more sharp rises in output prices, underlying wage growth isn't the only factor that matters for inflation.

Paul Cavey

Aug 5, 2026 • 3 min read

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East Asia Today

The main data release today was Korea July CPI, with one takeaway from that being the clear evidence of cost-push pressures from the chip boom. Elsewhere, the PBC again injected liquidity in July, Japan's monetary base contracted at a double-digit rate, and an update on Taiwan's property market.

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Korea – cost-push more than demand-pull

The BOK expects core inflation to be pushed up by the chip boom, via both cost-push for electronic devices and demand-pull from the big boost to national incomes. In today's July data, the cost-push element is more obvious, though there are some tentative signs of demand-pull appearing.

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East Asia Today

China's RatingDog mfg PMI dipped in July, and isn't far above 50, though that's still higher than the official version. PMIs elsewhere remain better. The main driver is exports, which in Korea rose again in July. But Taiwan's non-mfg PMI is also strong, at a headline level, and for output prices.