East Asia Econ

Korea – more K than elsewhere

Headline business sentiment has improved to take the BOK back towards neutral. But the details are mixed, with Korea's recovery more K-shaped than it has been before. With the semi cycle lifting exports, the BOK is now unlikely to ease further, but the bank still needs to see more domestic recovery.

Paul Cavey

Jan 27, 2026 • 3 min read

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Japan – easing inflationary pressure

Some of the slowdown in services PPI inflation is due to lower goods price inflation, but the combined result points to softer downstream inflation. SPPI inflation in high labour-intensive sectors is still over 3% YoY, but the recent MoM run-rate of under 2% is too low for the BOJ's inflation target

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East Asia Today

An update on visitor arrivals across the region, the quarterly household, business and banker sentiment surveys from the PBC, and insights from the BOJ's full outlook report that was released today.

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Japan – JPY matters more for CPI

The BOJ's full outlook report that was released today includes analysis arguing that the pass-through from JPY to CPI has risen, reflecting not only greater direct effects, "but also stronger secondary spillover effects, such as more active wage- and price-setting behavior of firms"