East Asia Econ

Welcome

Welcome to EAST ASIA ECON, a research service run from Taipei by Paul Cavey, and specializing in the markets and macro of China, Japan, Korea, and Taiwan.

We cover all the major data releases, as well as providing weekly and monthly summaries. We also devote a lot of time to thematic work, aiming to understand development patterns across the region, and to find common investment themes.

The analysis is founded on an on-the-ground knowledge gained from thirty years experience living, travelling and working in the region. We also have a very strong data infrastructure, built by directly accessing official sources, and made available to subscribers via a comprehensive range of interactive charts and a data app.

We don't think you'll find coverage that is as comprehensive and rounded anywhere else. The articles and charts below give a flavor of the work we are doing. There is a lot more on the home pages of the individual economies.

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Korea – BOK still more worried about growth

Korea – BOK still more worried about growth

Given the rise in house prices, that the BOK didn't cut rates today wasn't a surprise. However, the bank sounded much more confident than I'd expected that the rebound in house prices would be temporary. So, this really is just a pause, and the bank made no change in its "rate cut stance"

2 min read

Japan – goods prices starting to reverse

Japan – goods prices starting to reverse

Data today show more feed through into PPI from the easing of import prices. Weekly rice prices have also dropped again. These trends lower goods price inflation, but will boost household spending power. At the same time, the sharp fall in auto export prices shows the negative impact of tariffs.

4 min read

China – deepening deflation

China – deepening deflation

I am away from my desk, so for now, just a few charts on the CPI/PPI release. Deflation is deepening, which for PPI is broad-based. Core CPI is more stable, but that's partly due to a rise in "other" prices. Headline CPI is lower on food prices, which have started dropping again.

1 min read

Taiwan – madly strong exports, TWD reducing inflation

Taiwan – madly strong exports, TWD reducing inflation

Overall exports, and the trade surplus with the US, continued to surge in June. That Taiwan nonetheless wasn't the recipient of a Trump letter may be because of the sharp rise in the TWD. Other data today show that helping to push down inflation, opening up space for interest rate cuts.

2 min read

Japan – still the real wage squeeze

Japan – still the real wage squeeze

Nominal wage growth remains firm, but real wages to continue to fall. That in turn is weighing on consumption, which other data today show remained sluggish in May. The cycle in 2H will likely depend on goods prices, because that will determine the strength of real wage growth and consumer spending.

2 min read

Region – themes for 2H

Region – themes for 2H

A comprehensive slide pack putting cyclical developments in the context of the structural themes I've been working on: 1) China, CNY v consumption; 2) Japan, Still looking different this time; 3) Korea, Becoming East Asian and 4) Taiwan, 1980s redux.

2 min read

Japan – BOJ officials still leaning positive

Japan – BOJ officials still leaning positive

The renewed tariff threat is a dominating issue for Japan. Yesterday's debate among leaders of the political parties didn't reveal any new strategy to head off the risk. But today's services PMI was firm, and in an interesting speech, board member Takata continued to sound cautiously constructive.

5 min read

Korea – headline CPI ticks up, but should now fade

Korea  – headline CPI ticks up, but should now fade

Leads suggest the mild rise in headline CPI in June should now fade. Core inflation is more stable, in part because services inflation remains on the high side. In next week's meeting, the BOK is unlikely to show much concern about that, with the focus instead being the rebound in property prices.

2 min read

Japan – issues sharpen for the BOJ

Japan – issues sharpen for the BOJ

In terms of inflation, the details of the Tankan were stronger than yesterday's headlines. Output prices – a good lead for underlying CPI – rose to another new post-1980 high. However, President Trump, as had seemed likely, is now threatening Japan with yet higher tariffs.

2 min read

Japan – helpful rebound in consumer confidence

Japan – helpful rebound in consumer confidence

In recent months, Japan has encountered two headwinds: higher tariffs which threaten exports, and rebounding inflation which reduces consumer purchasing power. Inflation expectations eased in June, allowing consumer confidence to rebound. That is helpful in offsetting the pain coming from tariffs.

3 min read

Korea – finally, export perk up

Korea – finally, export perk up

Today's full-month June export statistics show exports finally breaking out of the range of recent months. I wouldn't think that will continue. It is all because of semi, big exporters like Samsung, Kia and Hyundai haven't benefited from the recent Kospi rally, and exporter sentiment remains weak.

3 min read

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