- - CHINA’S PRICE WARS WILL PROMPT POLICY RESPONSE
- - BOJ STRIKES CAUTIOUS TONE ON GROWTH OUTLOOK
- - BOK LIKELY TO EASE, DESPITE CURRENCY WORRY
Kelvin Lam (Senior China+ Economist)China+
- Involution (内å·), or excessive competition, has been a buzzword in China in recent years.
- Industrial profits are being squeezed by oversupply, weak demand and excessive competition.
- Policymakers started an anti-involution campaign in earnest in July, hoping to restore industrial orders.
Kelvin Lam (Senior China+ Economist)China+
- Japan’s Upper House election is done and dusted; the coalition has now lost its majority in both houses.
- July’s 20-day exports held up on a WDA basis, despite the higher tariffs applied to Korean exports to the US.
- A preliminary US-Korea trade deal may be reached before August 1, but anything agreed will be general.
Kelvin Lam (Senior China+ Economist)China+
- Japanese export growth was surprisingly weak, because of a drop in shipments to Taiwan and Canada.
- Japan’s economy has probably entered a technical recession in Q2, likely dragged down by net trade.
- The LDP coalition is at risk of losing its Upper House majority; this will be bond-and yen-negative.
Kelvin Lam (Senior China+ Economist)China+
In one line: Better external sector performance likely to support Q2 GDP due tomorrow.
Kelvin Lam (Senior China+ Economist)China+
In one line: BoK hold rates in July, keeping an eye on trade developments and overheating property market in Seoul.
Kelvin Lam (Senior China+ Economist)China+
In one line: China’s FX reserves rebounded in June on currency and bond revaluation gains.
Kelvin Lam (Senior China+ Economist)China+
In one line : Japanese wage growth is not as weak as it looks, the wage slump was mostly about bonuses.
Kelvin Lam (Senior China+ Economist)China+
In one line: China’s services momentum cools amid property drag and post-holiday blues; Caixin composite PMI signals softer Q2 GDP.
Kelvin Lam (Senior China+ Economist)China+
- The BoK kept the policy rate unchanged in July, citing concerns over trade policy and Seoul’s housing market.
- The MPB was torn, focusing its decision on trade- induced growth worries versus financial stability risk.
- We expect the Bank to resume rate-cutting once apartment prices show signs of easing in Seoul.
Kelvin Lam (Senior China+ Economist)China+
- The HKMA intervened again on Wednesday to defend the currency peg, which has been in place since 1983.
- The LERS is a double-edged sword: Hong Kong loses monetary policy freedom but gains stability.
- Any talk of re-pegging the HKD is premature; China and HKSAR are not yet an Optimal Currency Area.
Kelvin Lam (Senior China+ Economist)China+
In one line: Japan's manufacturing PMI rebound on stockpiling activity, but domestic demand softens
Kelvin Lam (Senior China+ Economist)China+
In one line: Japan's services business activity grow faster in June, but slowing input cost increase bode ill for wage growth
Kelvin Lam (Senior China+ Economist)China+
In one line: China’s current account balance holds up in Q1, but deterioration likely in Q2.
Kelvin Lam (Senior China+ Economist)China+
In one line: Japan’s GDP shrinks for the first time in a year, reinforcing the BoJ's wait-and-see stance.
Kelvin Lam (Senior China+ Economist)China+
In one line: Korea's 20-day exports rebound in June on front loading ahead of reprieve expiry
Kelvin Lam (Senior China+ Economist)China+
In one line: Japan's core inflation surprised on the upside, but unlikely to sway BoJ into hiking mode
Kelvin Lam (Senior China+ Economist)China+
- Korea’s 20-day export growth rebounded, likely supported by stockpiling as the US’s deadline nears.
- Shipments to the US, EU and Taiwan were the main drivers, while chip exports were strong in June.
- The trade-talk logjam continues; we expect the grace period to be extended, allowing more negotiating time.
Kelvin Lam (Senior China+ Economist)China+
In one line: China's commercial banks hold benchmark lending rates steady in June
Kelvin Lam (Senior China+ Economist)China+
In one line: BoJ slowed tapering pace for next fiscal year but stood pat on policy rates in June
Kelvin Lam (Senior China+ Economist)China+
