Paul Cavey

China - June PMI

The PMIs rose in June, but the neither the size of the improvement nor the details of the surveys suggest that the economic recovery out of Covid will be particularly strong.

China – Q2 sentiment surveys

Japan – June consumer confidence

Korea – June consumer confidence

Consumer confidence fell sharply in June, as inflation expectations surged. The BOK will be remaining hawkish for the time being.

Japan – May trimmed mean CPI

China – where we're at

Our FCI remains accommodative. That, depressed activity, the fall in covid cases and a corporate sector that is somewhat of an even keel should ensure modest recovery. However, without a clearer policy push from the government, a real surge in growth in 2H feels unlikely.

China – May industrial profits

That industrial profits fell in May isn't a surprise. But the fall was fairly modest, and revenue remains on an upwards trend, with corporate earnings likely being helped by the strength of commodity prices in recent months.

Last week, next week

Japan – May CPI

The acceleration in inflation of the last few months stalled in May, with both core and headline unchanged. The leading indicators aren't yet suggesting a re-acceleration, with a softening of commodity prices offsetting the weakness of the JPY.

Japan – May services PPI

As with other inflation indicators, May service PPI shows price pressures running at multiyear highs. But the pick-up of the last couple of months is narrow, concentrated in international transport costs, which in turn related to the rise in energy prices.

Korea – June 20D trade

The East Asia Economist

The BOJ is under pressure, but Japan isn't in crisis. Rising energy prices hurt, but ending YCC would be painful too. Instead, it is probably better to focus on economic normalisation post-covid. That would likely include an influx of tourists concluding that, with the JPY at 135, Japan is cheap.

Taiwan – May export orders

Orders data continue to suggest that Taiwan's headline export growth slows towards zero in the next 3-6 months. That probably represents a best case outcome for export data for the rest of the region.

China – where we're at

Japan – Q2 BSI survey

Japan – BOJ meeting

The BOJ didn't move today, and while the central bank is facing strong market pressure to move, so far at least, there's not so much domestic political pressure.

Japan – May exports

Exports in volume terms remain elevated compared with history. But JPY weakness means a lot of variation in export values, and also a rapid rise in the import bill.

China – May property prices

Given everything else we already knew about May, it wasn't surprising that property prices were also weak last month. However, there needs to be a turnaround soon to think the correction is just cyclical rather than structural.

Korea – May employment

Japan – April machine orders

China – May activity data

The May activity data release didn't surprise. Most of the data were better than April, but not all. GDP may have grown YoY in May, but only just. Overall, the economy is recovering, but is still weak.

China – where we're at

China remains on course for modest recovery. Covid-19 remains a downside risk, while the upside is muted without clearer policy support.

China – May credit data

Just as the overall sentiment has passed through peak pessimism, so the credit cycle has lifted from the trough. But the credit data in May were mixed, and absent the emergence of a significant source of demand, the upside for credit is likely limited.

China – May foreign trade

China – May inflation