Below is a list of our China+ Publications for the last 6 months. If you are looking for reports older than 6 months please email firstname.lastname@example.org, or contact your account rep
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Loan Prime Rate
- New aggregate financing plummeted in December as China was buffeted by gigantic Covid waves...
- ...But big cities appear to be past the worst, and many other regions are following close behind...
- We expect a marked rebirth of credit demand post-Chinese New Year, building in Q2 onwards.
- The BoJ widened the 10-year yield trading band yesterday, taking markets completely by surprise...
- ...The official rationale is to alleviate the side-effects of yield curve control on the bond market...
- ...But we see it as providing the BoJ with more flexibility on timing policy tightening, bolstering the yen.
- In one line: the BoJ Tweaks Trading Range on 10-Year Yields
The BoK hikes by only 25 basis points, balancing worries about growth and inflation
- Korean 20-day exports fell at a faster rate in November, in a further weakening of global demand.
- Exports shrank to most major markets, with a dramatic decline in shipments to China.
- China’s one-year loan prime rate was unchanged, as the PBoC relied on targeted liquidity measures.
- The BoJ acknowledges higher CPI inflation for the
rest of 2022...
- ...But continues to forecast a drop in the core rate to below the 2% target in late 2023.
- Nothing in the Tokyo CPI data will make the BoJ change its assessment.
- Japanese exports have been almost flat in dollar terms, despite headline growth in yen terms.
- Rapid import growth and a large trade deficit contin- ue to put pressure on the yen.
- China’s benchmark lending rate was unchanged, as policymakers focus on the Party Congress.
- Xi's Congressional opening speech signalled no immediate shift from current policy settings.
- We see zero-Covid policy continuing until at least mid-2023, if not later.
- The PBoC left the MLF rate unchanged, in implicit acknowledgement of China's liquidity trap.
Another outsized but dovish rate hike by the BoK
- Japan has embarked on direct currency intervention in support of the yen for the first time since 1998.
- The main goal of this intervention is to slow the pace of depreciation, rather than draw a line in the sand.
- Monetary policy will be kept at its current easy settings, undermining any attempt to defend a level.
In one line: A long pause for monetary policy, but thinking on the yen is shifting
Doves defiant at the BoJ
Still no change expected from the BoJ, despite another jump in inflation
Lending rates left on hold in China
- The renminbi is weakening once again, in the face of dollar strength, but that’s not the full story.
- The currency’s ability to defy gravity is fading, and this reflects the growing impotence of the PBoC.
- The liquidity trap is closing tighter, creating an asymmetric profile of outcomes for monetary policy.