Public Post QTC: Taiwan – stronger since covid Taiwan must be about the only economy where covid provided a big boost to GDP, a lift that today's Q124 data show once again isn't disappearing.
Public Post QTC: Japan – inflation erodes confidence again Consumer confidence for May has the same message as the earlier EW survey: the weaker JPY and rise in goods prices is once again eating into real incomes and eroding consumer confidence.
Public Post QTC: China – rising import prices suggest PPI rebound Import prices rose for the second consecutive month in April. It will be a surprise if domestic PPI inflation doesn't now follow suit, and in so doing challenge the idea that China is stuck in deflation.
Public Post QTC: Japan – strong upstream services inflation Services PPI has been one of the best indicators of Japan's structural exit from deflation. The slowdown from mid-2023 had thus been concerning. But a rebound started earlier this year, and today's release for April was very strong.
Public Post QTC: Taiwan – no consumer slowdown Domestic activity carried the economy in 2022-23 as exports slowed. Exports are now picking up, but consumption is also remaining solid. Consumer confidence isn't particularly strong, but purchasing intentions are.
Public Post Japan – BOJ still confident The summary slide from BOJ Uchida's speech today is complex. The last line of the text was clearer: 'I would like to conclude my speech with this phrase: “This time is different.”'
Public Post China – PPI turning up High-frequency data continue to show a lessening of upstream deflation, though the change is being disproportionately driven by copper prices.
Public Post Japan – underlying inflation ticks up The uptick in underlying inflation in April wasn't much, but is still important, as it fits with the BOJ's idea of transition from import prices to services prices.
Public Post Taiwan – exports catch up to domestic demand Covid disrupted the usual synchronisation between exports and domestic demand. Recent resynchronisation is positive for the outlook, happening not by domestic demand slowing, but exports picking up.
Public Post China – is that it for the export pause? So far, the much-discussed rise in China's competitiveness has been most obvious in import substitution. With the export cycle now recovering, it is likely this year to also be seen in a renewed increase in China's global market share.
Public Post Region – what equity markets are pricing in for exports Updating these charts after Nvidia's results. Semis account for almost 50% of Taiwan's exports, compared with 20% in Korea. For now, that looks like a good dependence to have.
Public Post Japan – cycle still solid At 53.6, S&P's flash services PMI for May dipped a little from April, but remains well above the long-term average of 49.8. At the same time, the mfg PMI rose above 50 for the first time in a year.
Public Post Japan – strong exports, but only in nominal terms Firms still aren't using the weak JPY to cut USD prices and increase volumes. Instead, the ccy weakness continues to flow straight into JPY earnings
Public Post Taiwan – employment still rising Employment rose to another all-time high in April, keeping unemployment below 3%. This labour market tightness is striking when the mfg PMI has been below 50 for most of the last 2 years.
Public Post China – only importing commodities You might think that with property activity collapsing and a mfg boom, China would import fewer commodities and more capital goods. But what's actually happened is almost exactly the opposite.
Public Post Japan – domestic strength Data today continue the theme of export sluggishness v domestic strength. Exports underwhelmed in April, but the post-covid pick-up in domestic machine orders continued through March.
Public Post Korea – only good for big firms Chaebol dominance isn't new. But at least cyclically, what's good for large firms usually lifts the small too. But that hasn't been true in 2024, and the gap complicates the BOK's task.
Public Post Korea – borrowing growing, but slowly Household borrowing is consistent with the BOK's on-off contention of a soft landing. It is now rebounding, but much less quickly than it was growing before 2020.
Public Post Korea – exports stronger, but only semi Export performance has been stronger in May. Workday-adjusted growth in the first 20 days was almost 20% YoY, a recovery that continues to rely solely on semiconductors.
