Korea – strong, but still unbalanced

Earnings releases and September macro data show the cycle has strong momentum. Growth is dominated by semis, and so dependent on the global cycle. However, the doubling in tax revenue in September shows one way in which the benefits of the semi cycle can start to broaden out.

Paul Cavey

Oct 30, 2026 • 4 min read

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East Asia Today

Highlights of a longer note that takes stock of Japan before the BOJ meeting tomorrow, with the theme being short-term nominal strength. In China by contrast, equity market falls highlights deflationary risk. Business sentiment in Korea ticked up. Taiwan's monitoring index in September was strong.

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Japan – medium-term concerns

With both growth and inflation strengthening, it will be tough for the BOJ not to hike faster – whatever Takaichi thinks. However, back-to-back or 50bp moves are unlikely. Moreover, the peaking of property prices and sluggishness in some wage indicators point to MT headwinds.

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East Asia Today

Foreign equity holdings are another example of the huge impact of the AI cycle in Korea and Taiwan. Trade volume data in China illustrate again that imports are as weak as exports are strong. Money supply and credit data in Taiwan are strong, but likely not strong enough to push the CBC into action.