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Even after Thursday’s hike, China’s retail prices for refined fuels are well below those in international markets. However, that probably won’t be the case for much longer – either global oil prices will drop back, or Chinese fuel prices are likely to be …
25th June 2008
The Reserve Bank of India (RBI) today announced a 50bp hike in the repurchase rate, to 8.5%, and plans for two 25bp hikes in the cash reserve ratio next month, taking it to 8.75%. The move is an appropriate rebuttal to the mounting criticism that the RBI …
24th June 2008
The Bank of Japan’s quarterly “Tankan” survey for June, due next Tuesday (1st July), will almost certainly report that business conditions have deteriorated. However, there has been some better news since March. Indeed, despite some gloomy headlines, the …
23rd June 2008
This report is only available as a PDF. Click to download. … Fuel price hikes send India's inflation to 13-year high …
China’s decision to hike fuel prices confirms that domestic concerns over inflation are easing. What’s more, the move could help to cap global oil prices. … Easing inflation concerns behind Chinese fuel price …
19th June 2008
China’s equity investors have been left stunned by a 20% fall in prices since the beginning of June. This has taken the benchmark Shanghai Composite index beneath the 3000 level that many investors had assumed was a governmentsupported floor, but no …
This report is only available as a PDF. Click to download. … Where is Chinese inflation heading? …
16th June 2008
The Bank of Japan predictably left rates on hold today. But with inflation expectations soaring, we believe that rates will be raised again sooner than generally anticipated and perhaps even earlier than the November hike we have already penciled in. …
13th June 2008
This report is only available as a PDF. Click to download. … Next move in Korean rates still likely to be a cut …
12th June 2008
Chinese equity prices are again scraping the levels at which many investors assume the government will intervene to provide support. In the long run though, the government’s unwillingness to step back from the markets is doing more harm than good. … …
10th June 2008
Recent actions by several Asian countries to limit the cost of fuel subsidies highlight the stresses that high oil prices are causing in emerging economies. India, Indonesia and Malaysia (as well as Taiwan) have each allowed administered fuel prices to …
9th June 2008
This report is only available as a PDF. Click to download. … Slowdown in Korean economy to outweigh inflation concerns …
Today’s release of China’s balance of payments figures for 2007 provides no firm answers to the question of whether hot capital inflows are flooding the country. Growth of the trade surplus has slowed, which reduces one source of these inflows. However, …
5th June 2008
High oil prices have forced a number of Asian countries to reform their fuel subsidy programmes in the last couple of weeks. China is by far the largest oil consumer in the region and matters far more to global oil demand. But China’s government is more …
This report is only available as a PDF. Click to download. … Corporate Japan in good shape to weather global slowdown …
4th June 2008
This report is only available as a PDF. Click to download. … Should China tighten monetary policy? …
2nd June 2008
Rebalancing of China’s economy away from investment and heavy industry will require significant reform of the financial sector and of monetary policy, including higher (not lower) interest rates. Financial sector reform will include further development of …
29th May 2008
Indonesia’s latest round of fuel price hikes was designed to safeguard fiscal sustainability and is therefore positive in the long run. However, a worsening near-term inflation outlook is likely to prompt Bank Indonesia (BI) to continue to raise interest …
28th May 2008
This report is only available as a PDF. Click to download. … Fuel subsidies under review as budget costs soar …
26th May 2008
A surge in populist policies and government interventions has sparked concerns that Asia’s third largest economy is turning its back on liberalisation. The moves follow on from the failure of the ruling Congress party to execute successfully economic …
21st May 2008
A large one-off revaluation of the renminbi remains highly unlikely. It would lead to job losses and give a jolt to China’s fragile financial sector. But, with officials increasingly concerned about speculative inflows and the inflation outlook uncertain, …
The diversification of Singapore’s exports base and a much healthier outlook for domestic demand should help the city state to avoid recession this year, despite the downturn in the US. … How will Singapore fare in a US …
We believe that the rapidly developing Asian economies will be able to continue growing strongly even as the US slows. Asian economies are closely enough linked to the US such that there will inevitably be significant spillovers through trade. However, …
20th May 2008
The renminbi’s long pause at seven to the dollar is evidence that the Chinese currency is as closely tied to the US dollar as ever. A gradual loosening of that link is likely to be the next major evolution of China’s exchange rate regime. But the worst …
19th May 2008
This report is only available as a PDF. Click to download. … India’s growth inflation trade-off takes a turn for the worse …
Suggestions that China’s earthquake will affect economic growth, or prompt a loosening of monetary policy, are wide of the mark. In any case, with the People’s Bank more wary than ever of the dangers of attracting capital inflows, China’s supposedly tight …
14th May 2008
This report is only available as a PDF. Click to download. … Has China changed its mind on the renminbi? …
12th May 2008
Today’s decision by the Bank of Korea (BoK) to hold the official 7-day repo rate at 5.00% reflected concerns about oil price-induced inflation and the still relatively high liquidity levels in the financial system. But with domestic demand slowing and the …
8th May 2008
The Asian financial system has so far proved to be fairly resilient to the US subprime crisis. Asian exposure to opaque asset-backed securities has been well below that of other (primarily Western) economies. However, the region remains vulnerable to …
7th May 2008
Inflation has re-emerged as a unifying theme across many Asian economies in recent weeks. Driven by the continuing high international oil and food prices, persistent upside surprises to inflation have forced a rethinking of monetary policy in the region. …
6th May 2008
This report is only available as a PDF. Click to download. … Japanese banks and the subprime crisis …
5th May 2008
Even allowing for a marked slowdown in the second and third quarters, a strong start to the year means that Japanese GDP is still likely to grow by around 2% in 2008. This would be comfortably above the consensus of 1½% and not much different from the …
2nd May 2008
The Bank of Japan left rates on hold today, as universally expected, but the tone of its twice-yearly “Outlook for Economic Activity and Prices” is more dovish than we at least had anticipated. In particular the changes in the language on interest rates …
30th April 2008
China’s headline inflation eased in March, but there are worrying signs that price pressures may be spreading beyond food. The activity data confirm that the economy remains strong, easing at least one set of concerns over the outlook. Export growth has …
29th April 2008
The Reserve Bank of India (RBI) defied market expectations by keeping interest rates on hold today and instead announcing another increase in the cash reserve ratio, to 8.25% (with effect from 24th May). The choice of instrument is an attempt to reduce …
This report is only available as a PDF. Click to download. … Japan: underlying inflation to rise further …
28th April 2008
There is unlikely to be much respite for battered Chinese equity investors in the near term. Macroeconomic fundamentals suggest that the markets in Shanghai and Shenzhen may have fallen too far, but disappointing corporate earnings and fears over monetary …
23rd April 2008
This report is only available as a PDF. Click to download. … Drop in headline rate masks rising Chinese inflation concerns …
21st April 2008
Japanese consumer confidence remains near five-year lows despite a slight pick-up last month. Nonetheless, spending is holding up well. The single biggest negative for confidence is the perception that inflation is soaring (another reason why the next …
18th April 2008
Fiscal policy could make a significant contribution to reducing China’s massive current account surplus, though discussion of rebalancing often overlooks its potential. The government has the resources to increase spending or cut taxes now, but it is …
17th April 2008
Data showing that both GDP and consumer price inflation remain strong guarantee that the People’s Bank of China (PBoC) will remain focused on tackling rising prices. Today’s decision to raise bank reserve requirements shows that the People’s Bank will use …
16th April 2008
This report is only available as a PDF. Click to download. … China slowing, but still strong …
14th April 2008
The fall in China’s trade surplus in the first quarter is evidence of economic strength within China, not of its vulnerability to a slowdown elsewhere. What’s more, today’s revisions to the official GDP data confirm our suspicions that the Chinese economy …
10th April 2008
The recent equities and government bonds sell-off in Indonesia has prompted comparisons with an episode in August 2005, when concerns over the fiscal impact of rising oil prices triggered a similar reaction. However, a number of important differences mean …
8th April 2008
This report is only available as a PDF. Click to download. … Bank of Korea to focus on growth, not inflation, risks …
7th April 2008
Asian exporters have enjoyed a strong start to the year with continued healthy demand from elsewhere in the region and from Europe helping to offset slower growth of shipments to the US. But the US slowdown will have a more pronounced impact in the months …
3rd April 2008
We expect the renminbi to rise by around 15% against the dollar this year (taking it to 6.20 yuan/$) and another 10% in 2009 (to 5.60). The faster pace of appreciation over the last few months has probably been kick-started by inflation concerns and …
1st April 2008
The Bank of Japan's Tankan survey of business conditions in manufacturing was slightly weaker than the median forecasts, but the risks were always on the downside and the actual results are still something of a relief. The detail included some reassuring …
Today’s mixed bag of Japanese data contains something for everyone. The fall in industrial production is consistent with talk of recession, but the trend recovery in housebuilding continues and wages are finally picking up. … Japanese output falls, wages …
31st March 2008
This report is only available as a PDF. Click to download. … Harder times ahead for Asian exporters …
