During the Iran war, Japan faced lower growth, making the BOJ cautious about higher rates despite inflation. Now, there is still inflation, but growth momentum is also bouncing back fast, with the latest indicator being today's flash PMIs for June. S&P reported that the improvement in the data
For the first time in a while, China is now accounting for a rising share of global imports. Semiconductors and gold explain a lot of this, but data at the weekend show capital goods imports holding up – and in turn casting further doubt on the weakness of the official FAI data.
Data today show Korean YoY export growth slowed a touch in the first 20 days of June. However, that was largely base effect, with MoM growth remaining strong. That wasn't true for semiconductor exports, but this year there are finally signs of life in non-tech shipments.
PPI accelerated to 8.5% YoY in May. With the rise in import prices already reported for May, it was no surprise that goods price inflation accelerated again, rising to over 10% YoY for the first time in 2022. However, relative to history, it is services PPI inflation that is stronger.
On official measures, inflation remains modest. But the numbers are being dragged down by subsidies from the government. The big one is the ceiling on the pump price, which means consumers won't see much direct benefit from the fall in global oil prices.
The big contributors to this year's sharp rise in imports are semiconductors and gold. Neither say anything about domestic demand. However, as much as those categories explain most of the rise in USD terms, import demand has also been broad, and in contrast to renewed worries about China's cycle,…
After the big rise from February, upstream commodity prices in China since April have been remarkably stable. Energy and chemicals prices have fallen from the highs, but metals prices have been firm.
As expected, the BOJ raised rates today. The bank stated that the "the risk of a significant slowdown in the economy appears to have decreased". But that assessment doesn't seem to have been made because of the US-Iran deal, so presumably the bank will feel even more constructive now that the…
China's fx settlement data has fallen back from the USD100bn spike of December, but the USD30bn average run rate of the last three months suggest that the pace of net capital inflows into China remains solid. It is this inflow that forms the backdrop for the CNY appreciation of recent months.
Taiwan's net foreign asset position fell in 2025 for the second consecutive year. The decline was because of a big rise in the value of foreign holdings of Taiwanese financial assets, which the central bank attributed today to valuation gains.
MoM credit growth ticked up slightly in May, but that still leaves it as the bottom of the range of the last few years. The ongoing drag remains the household sector, but in recent months government borrowing has also dropped.
Smoothing out monthly noise, the trend of a steady acceleration in underlying wage growth is still intact. That is being led by manufacturing, and today's data on overtime hours worked suggests demand for labour in the sector remains strong.
Sentiment in the joint MOF/Cabinet Office quarterly business outlook survey dropped in Q2. That isn't a surprise, given the declines already seen in the monthly PMI and Economy Watchers surveys.
TSMC's sales rose 30% YoY in May. That lifted revenue to a new all-time high of TWD417bn, more than tripling from the level of 2019. The equity market remains optimistic that there is more growth ahead, although this year there has been much more bullishness – and volatility – in Korea.
To get ready for next week's CBC meeting, some data on the residential property market. In the 2022-24 tightening cycle, real estate was a specific target for the bank. Hit by all the macro-prudential measures, property transactions did slow sharply through 1H25.
In his speech this week, governor Ueda said that while consumer sentiment has fallen, consumer spending hasn't. That was bourne out by today's consumption activity data from the BOJ, which suggests quite good momentum for PCE at the beginning of Q2.
The S&P/RatingDog PMIs show that the cycle has the best momentum since the period that followed the ending of zero covid. That's a big contrast with the picture painted by the official PMIs, which is one of no growth at all. The gap between the two is frankly confusing.
On official data, the main dynamic in trade values in January-March was volumes. In April, particularly for imports, it was much more about prices, which increased more quickly than any time in the last ten years.
In the outlook report the BOJ published at the time of its last monetary policy report, the bank outlined a risk case that would lift CPI to inflation to "about 3%" both this year and next, an "upward deviation in the CPI could become a factor that pushes up medium- to long-term inflation…
Taiwan's PMIs were strong, with both the official and S&P versions rising in May. Some of this is related to Middle East supply disruption, with delivery times lengthening again. However, the change wasn't big from April, and new orders were also firm.
Exports continued to rise in May, with YoY growth reaching 53% YoY. With energy imports still constrained, the further increase in exports kept the trade surplus above 15% of GDP. With the export story being all about semiconductors, the same is true for the external balance.
Profits in Q1 grew to yet another all-time high of almost 20% of GDP. That's remarkably high in absolute terms, and compares to the whole period before 2005 when profits had never risen through 10% of GDP.
The two interesting aspects of all the many data releases today was the bounce in retail sales, and the big rise in the labour market participation rate. The former, boosted by car sales, doesn't look sustainable when consumer confidence – also released today – remains weak.
Taiwan's official composite monitoring indicator for the economy came in at 39. That keeps it in the range that represents "economic boom".
Early trade data for May show little sign of external deterioration in USD terms. Volumes, however, might be weaker, as export values are being boosted by higher prices for semiconductors and petroleum products.
