Paul Cavey

Taiwan – how to dispose of USD100bn?

China – neither better nor worse

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Japan – still warming up

The BOJ releases its quarterly Tankan survey in two parts. The summary was published Friday, and today's full release confirms the story: the forecast scores point to a labour market that is still tightening, and output price pressure that is continuing to build.

Last week, next week

Japan – another very solid Tankan

China – a little more encouraging

Japan – solid data again

Korea – exports weak, employment stable

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Taiwan – two accelerations holding

With the strong trend growth in TSMC's sales since the end of 2023 holding, it makes sense that the pick-up in manufacturing wage growth is too. Neither TSMC nor manufacturing are the whole economy, but they are important components, and put Taiwan's cycle in a very different state to Korea.

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China – how "loose" can policy be?

Yesterday's BIS credit data for Q2 show why shifting to "loose" monetary policy isn't simple. The loosening of 2008-09 kicked off a rise in credit that hasn't stopped even though policy since then has been "prudent", and that in turn been a big obstacle to policy officially turning loose again.

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China – trade surplus widens again

On my estimate, China's seasonally adjusted trade surplus in November reached a new all-time high. This is partly about firm exports, more evident in volume than values. But it is also about weak imports, which however they are measured, have now been going sideways for almost two years.

China – what might "moderately loose" mean?

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Taiwan – export values ok, volumes still strong

In YoY value terms, November data confirm that the export cycle has peaked. However, there still isn't much slowing yet because in MoM terms, exports are still gradually trending up. Moreover, at least through October, exports volumes remained strong. Semi is leading the rise.

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Japan – solid growth in 2H24

Today's 2nd release of Q3 GDP data was revised up to 1.2% saar, on the back of stronger capex and exports, but consumption was revised lower. The rise in today's EW survey suggests growth has improved further in Q4. The cycle is solid more than spectacular, but shows no damage from the July hike.

China – CPI details a bit better than headlines

Last week, next week

Japan – wage data better than consumption

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Japan – acceleration in wage growth holding

There's no sign of any faltering in the latest acceleration in nominal wage growth that began in 2023. That's true for both full- and part-time workers. For full-time workers, real wage growth is also improving, though so far, the extent of the change is just that earnings are no longer falling.

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Taiwan – core inflation remaining around 2%

Inflation has eased, but outside of imported prices/goods, still isn't particularly soft. With the cycle also ok, the central bank won't be rushing to cut. So, while it would be usual to compare Taiwan's economy to Korea, in terms of current monetary policy, it has more in common with Japan.

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China – prices versus Japan

China rates falling below Japan has attracted attention. Commentary in today's services PMIs explain the context. In China, cost inflation in November fell "to the lowest since the current sequence of inflation began in July 2020". In Japan, by contrast, "inflationary pressures remained marked.".

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China – M1 versus liquidity preference

The PBC has followed up on earlier hints and announced household demand deposit inclusion in M1. That makes sense, and it will moderate the fall in M1. But while HH demand deposits are rising, time deposits are growing more quickly still, and it is this that needs to reverse for cycle recovery.

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China – the consumption challenge

As a long-time fan, I was very pleased to have a piece in the latest China Leadership Monitor. It argues that while cyclically, spending hasn't been so bad, that isn't enough given the property bust. Even so, and despite interesting proposals from onshore economists, policy support is still lacking.

Korea – private services inflation still edging up

Region – not much momentum

Japan – profitability holding up