East Asia Econ

Last week, next week

As usual, a recap of research over the last week but today, no refresh of market themes. I am now away for a few days, so updates will re-commence when I am back on May 4th.

Paul Cavey

Apr 25, 2026 • 4 min read

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East Asia Today

Three longer pieces today: on the regional chip cycle, Japan in the run-up to next week's BOJ meeting, and a video discussing two macro puzzles in Korea. Also, charts summarising today's three data releases: upstream prices in China, and in Japan, CPI and services PPI.

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Japan – can the BOJ afford to wait?

The BOJ seems to be messaging that it will stay on hold next week. That seems risky to me, given that while the Iran War might dent growth, it is highly likely to raise inflation. A BOJ that is further perceived as too slow will put pressure on the $JPY to pass through the artificial barrier of 160.

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Region – the offset to oil: semiconductors

Whether the AI cycle sustains will be as important for East Asia markets as the Iran War. That's because the region is facing a negative energy supply shock, but also a positive semiconductor demand shock. Semiconductor trade trends are now critical for macro, as shown by these 12 charts.