Obviously, goods are the main mover in China's trade statistics, and with the government publishing both values and volumes, for merchandise trade we can also build a sense of underlying trends.
Leading indicators have been pointing to a rise in CPI inflation in 2H, Himino's comments yesterday affirmed that expectation, and in today's August data for Tokyo, inflation picked up for the second consecutive month.
Business sentiment in today's BOK survey rose to the highest level since October 2022. Given the chip boom, it isn't a surprise that the improvement in sentiment continues to be led by exporters, and in that sector confidence is well above the survey's long-term average.
Services PPI inflation ticked up to 3.6% YoY in July. Upstream prices have only risen this fast in three other months since the early 1990s. Most of the recent strength looks to be feedthrough from Iran and the exchange rate; inflation in industries with high labour intensity, which should be a…
Export volume growth isn't quite as strong this year as it has been, but at a monthly average of almost 7% YoY since April, it remains decent (export prices excluding AI-related hardware are still drifting down).
Exports have looked a bit wobbly since Q2, but that is not true of industrial production. Today's data for July show another big increase last month, bringing the cumulative rise since the beginning of the year to 16%.
Korean consumer confidence ticked down in August. But it remains comfortably above the neutral level of 100, and so consistent with a continuation of the recent recovery in retail sales growth. Inflation expectations were unchanged in today's survey.
The BOJ's measure of core inflation adjusted for government policy measures eased in July. However, at 2.3%, it has now been above the bank's official target of 2% for 51 of the past 54 months. Moreover, leading indicators continue to point to inflation re-accelerating in the remainder of this year.
Upstream prices have ticked up again, which isn't unexpected given the rebound in the global energy price, as well as the increase in global copper prices.
The unemployment remains pinned at a 25-year low of under 3.5%. The details don't suggest there is about to be a change, with forced redundancies low, and overtime hours (especially in manufacturing) remaining high.
Export orders were strong in July, reaching a new record high in level terms, a rise that pushed YoY growth back above 60%. In an illustration that Taiwan's export growth isn't just about semiconductors, the government attributed the strength to demand for servers and cooling products from the AI…
Export growth in the first 20 days of August ticked up again, a trend that unsurprisingly was led by semiconductors. That increase in turn pushed up the trade surplus. In other data today, YoY PPI inflation eased in July. For goods, that follows the modest decline in import price inflation.
The expected rebound in CPI inflation in 2H looks to have started in July, with YoY headline measures edging up, and a bigger lift in sequential terms. The rise – also as expected – is being led by goods prices.
Taiwan's current account surplus came down in Q2. Export growth remained strong, but imports rose too, and so the trade surplus dipped. Even so, at over 20% of GDP, the current account surplus remains enormous.
After increasing steadily for several years, Korea's net international investment over the course of a couple of quarters has dropped back to zero. That's because of the big rise in the Kospi, a rise which quadrupled the value of foreigner holdings of Korean equities.
The increase in USD exports that began in late 2025 continued in July. This is all because of the rising price of AI tech, with semiconductor exports offsetting the continued sluggishness in Japan's auto sales.
The BOK's comprehensive quarterly data show household debt continued to rise in Q2. However, the rise wasn't quite as big as in Q1. Moreover, on my calculations, the household debt ratio fell sharply in April-June.
Core machine orders were flat in Q2, though that follows a strong Q1, with the result that capex spending is likely still on an uptrend. By contrast, export orders were strong, likely reflecting the global rise in spending on tech hardware.
Data for upstream prices though the first 10 days of August show the overall price level remaining unchanged, with higher copper and energy prices offsetting weaker steel prices, as well as on the continuing sharp declines in building materials prices.
Yesterday's settlement data for July showed an easing of capital inflows, though not by enough to change the smoothed trend. I would expect that stability will be challenged if the PBC acts on expectations for renewed monetary policy easing.
Detailed export data show the big lift in EV shipments that began in June persisted in July. That is true in both value and volume terms. Unit prices are flat.
Taiwan's FDI is lumpy, and right now, there is another surge of spending in the US. This is notable for two reasons. First, it is another sign of the shift in Taiwan's trade and investment relationship away from China and towards the US.
GDP growth softened in Q2, but the details were ok. In particular, private sector capex ticked up, and while consumption in aggregate terms was flat, in per capita terms the decent recovery since mid-2024 remains intact.
China's overall credit impulse has dropped in the last few months, but that is all because of government bonds. Household borrowing remains weak too, but there are some tentative signs of stabilisation (albeit not for the first time). Corporate lending has been firmer.
One of the transmission mechanisms by which commodity price booms affect local economies is fiscal policy. As nominal growth rises, so tax revenue grows more quickly, giving the government more money to spend. The first part of that is on track, with tax revenue up 20% YoY in June.
