Today's consumer survey in Taiwan also showed a mild softening of the recent increase in inflationary pressure, and that helped support an equally mild rise in consumer sentiment. That still leaves consumer confidence down YoY.
The upgrade to growth would come on the back of strong exports, and today's business sentiment survey showed another improvement in exporter confidence to well above the historical average through June.
On a headline basis, core services PPI softened in April to 2.5% YoY, the lowest since early 2024. However, on a sequential basis the inflation rate isn't now slowing, and seems to have settled in a 2-3% range.
Headline growth in IP slowed in April, but that was partly base effect, growth is still above 20% YoY, and in level terms IP continues to rise. The context is strong global demand for Taiwan's tech hardware, but also an inventory:shipment ratio that at least through April was still improving.
The BOJ's preferred measure of core inflation excludes fresh food but includes energy. At a headline level, that fell in April to just 1.4% YoY. However, in the BOJ's calculation of underlying inflation excluding institutional factors, a series that it updates a couple of days after the government…
Upstream prices through the first 20 days of May indicate some mild downside risk for PPI inflation this month. I don't think I'd attach much importance to that. Global prices continue to suggest PPI inflation should be heading higher.
Taiwan's unemployment rate remains pinned at the 20-year low of 3.3%. Employment is creeping up, but can't rise quickly in part because Taiwan isn't experiencing the increases in participation rates that have had such a big impact on labour supply in Korea and Japan.
The sharp fall in consumer confidence in April partly reversed in May. That leaves it at a level that would normally indicate further room for consumer spending to rise.
Korea is likewise seeing a rise in inflationary pressure, with PPI inflation in April accelerating to 6.9% YoY. That is mainly because the Iran War is pushing up goods prices, though some of the same distortions in the finance sector that are affecting Korean CPI can also be seen in the rise in…
Hard data continue to suggest the cycle was firming up before the Iran War. Machine orders were strong in March, particularly from overseas. Exports in April were flat, with rising semiconductor shipments helping offset flat-lining auto sales. Forward-looking indicators are, however, more mixed.
We have all the detailed export data for China for April. Here are some highlights. These charts – and more – can all be made and downloaded from the dashboard on the website.
The current account surplus remained near 25% of GDP in Q1 for the second consecutive quarter. That this enormous surplus has yet to affect the currency is because of equity selling by foreigners, and because of investments overseas by domestic corporates.
The coincident reading in the May Reuters Tankan didn't change much, meaning that current sentiment in non-manufacturing remains very strong. However, the outlook score in both manufacturing and non-manufacturing is lower.
Today's quarterly data showing an acceleration in credit growth in January-March isn't a surprise, given the rise already shown by the monthly data. It also doesn't break the trend of mild deleveraging, in the sense that household credit is continuing to fall relative to GDP.
Despite today's relatively solid Q1 GDP release, there is little sign that all the macro stimulus since 2013 has done much to raise real growth. But there is an argument that without all the stimulus, things might have been worse.
Today's fx settlement data suggest a rebound in fx inflows in April from March. At USD40bn, the implied net flow is less than the December peak of USD100bn, but still solid compared with recent years.
, released yesterday, don't point to any big economic recovery. The credit impulse has clearly rolled over, and while that is largely because of lower CGB issuance, credit issuance to the corporate sector in April also dropped sharply.
Short-term PPI inflation risks are tilted to the downside, as the sharp rise in upstream prices from February loses some momentum. That's happening when PPI inflation had already risen more quickly than usual leads would have suggested likely.
BOJ Board member Masu painted a generally constructive view of the economy in his speech today, arguing that: smaller firms aren't suffering a profit squeeze; that policy interest rate hikes have been accompanied by increased demand for loans; and that underlying inflation is "drawing very close…
The growth-inflation trade-off exists in Korea too, as illustrated by today's labour market update. In April, the unemployment rate remained below 3%. That, however, was partly because of another drop in the participation rate, which helped offset a decline in employment.
Japan isn't as big a beneficiary as Korea and Taiwan, but the rise in semiconductor prices is still helpful. BOP data show a small trade surplus was retained in April, while the current account surplus bounced back to near record highs. Today's other data show the dilemma facing the BOJ.
Yesterday's quarterly monetary policy report from the PBC showed a further fall in borrowing rates for companies, but mortgage rates seem to have reached a floor. That probably reflects the stabilisation in long-term yields.
The details of the BOJ's monetary base show a further in JGB buying in April. That squeeze will continue. The bigger issue now is whether and how fast the BOJ tightens in terms of prices too. Today's summary of opinions for April indicate that June is a live meeting.
Today's data for March show regular wage growth has softened since Q425, particularly in manufacturing. This year there has also been a fall in overtime hours worked in the sector.
Korea's trade data for the first 10 days of the month can be noisy, a bigger risk in May given so far there have only been 5 working days. But at face value the data suggest no change in the trends of recent months: 1) chip exports strong; 2) energy imports not up much; 3) trade surplus high.
