Public Post China – strong exports in the PMI Both mfg PMIs for China were above 50 in April. There's some domestic bright spots, but the strength in the S&P PMI is all about exports.
Public Post Japan – still no retail recovery The labour market is tight, profits are up, business sentiment is strong, and inflation is higher. The one area of weakness is consumption, and that has yet to change.
Public Post China – less export price deflation Falling prices are often used as evidence for China exporting overcapacity. But export price deflation is now easing, as the base effect of the big inflation of 2022 fades.
Public Post Taiwan – px drive down consumer confidence As has been true in Japan, consumer confidence in Taiwan remains inversely correlated with inflation expectations, implying nominal wage growth is too low.
Public Post Taiwan – re-industrialisation I suppose it isn't really surprising given exports and the trade balance, but the bounce back in the manufacturing share since the early 2000s is still rather remarkable.
Public Post 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
Public Post 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.
Public Post 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.
Public Post 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.
Public Post 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.
Public Post 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.
Public Post 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.
Public Post 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.
Public Post 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.
Public Post 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.
Public Post 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.
Public Post 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.
