Paul Cavey

Japan – BOJ more confident

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Japan – much lower Tokyo CPI

Inflation fell sharply in Tokyo in April. The macro story should mean some of the decline is temporary, but it complicates the more bullish story the BOJ wants to tell

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Korea – incrementally weaker

Q1 GDP was solid, but the weakness in business sentiment in April makes us feel economic momentum is incrementally weaker. The consumer survey showed price expectations remaining elevated, which fits with weekly price data showing no big slowdown in food or energy price inflation through April.

Japan – services PPI stronger

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China – producer prices sideways

The NBS's series for 10-day industrial prices 10 suggests overall PPI has stopped falling, though with big differences depending on the commodity.

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Japan – services PPI bottoming

The drop in services PPI inflation since late 2023 has threatened the BOJ's wage-price narrative. It is important that March data suggest a floor.

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Korea – middle age pulls down confidence

Overall consumer confidence is at the average of the last 20 years. But by age, young people are more optimistic than usual, 40-60 year olds much less so.

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Taiwan – synchronised to the upside?

Unusual domestic strength got Taiwan through the '23 export recession. Exports are now recovering, but consumption is still holding up. That's good news for the economy, bad news for the central bank.

Japan – why isn't the JPY helping exports?

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Japan – strong cycle momentum

The flash services PMI remained strong in April, and the mfg PMI lifted towards 50. S&P also reported the survey showing "intensifying price pressures". Japan is heating up.

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Taiwan – still no big export recovery

There was a bit of pick-up in IC orders in March, but not by enough to lift total orders, which have yet to regain 2023 levels. The export recovery remains sluggish.

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Japan – strongest sentiment globally

Relative to history, business sentiment in Japan is the strongest among most major economies in both mfg and non-mfg. That's only been seen once before.

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Japan – China still weighing on exports

Japan's export volumes to China are still almost 20% below the peak. Nor surprising, when the only strength in China's imports is primary goods and semi.

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Korea – modest export upturn continues

Korean exports are recovering. But at 5-10% YoY, growth doesn't yet look strong enough to offset weakness in the domestic economy.

China – exports so-so

Last week, next week

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China – importing only semi

There's quite a contrast between the sense of domestic manufacturing capex boom, and the lack of any rise in imports of capital goods outside of semi.

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China – auto exports sideways

There are many reasons to expect a new wave of Chinese EVs to the world, but the last one arguably peaked in 2022, and another has yet to appear.

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Taiwan – TSMC's outlook still positive for exports

TSMC yesterday was less bullish on semi as a whole in 2024, but its own unchanged sales outlook still suggests a strong year for Taiwan exports

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Japan – finally, some rental inflation

It still isn't even at 0.2% YoY, but rental CPI is now rising the fastest since the 1990s, which is pulling up imputed rent too. Together, they account for almost 20% of the basket.

Japan – core inflation lower

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China – no change in buyer sentiment

It is remarkable, given the big mortgage rate cuts and everything else thrown at the property market, that buyer sentiment just gets worse and worse.

China – no household sector revival

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Japan – tourism diversification

The cheap JPY isn't boosting Japan's merchandise exports, but it has helped with a sharp recovery in tourism, even though arrivals from China remain subdued.

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Taiwan – so far, only TSMC

The recent recovery in the mfg cycle has been underwhelming. One reason is its narrowness: sales at TSMC are up, but for the rest of the listed are flat.