(MENAFN- ING)
Japan: Slight moderation of inflation expected
Tokyo inflation is the highlight of the week, while other data should suggest a modest recovery in Japan’s economy in the second quarter.
We expect the inflation rate to moderate slightly to 3.3% year on year in June from 3.4% in May, though it will remain at an elevated level. The government’s release of stockpiled rice should help lower prices. However, it’s important to note that other services prices, including rent, are likely to continue growing at a steady pace.
Labour market conditions are likely to remain tight, with the unemployment rate staying at 2.5% in May. Retail sales are expected to rise quite meaningfully, thanks to government subsidies and cash handouts. We believe that flash purchasing managers’ indices (PMI) should show modest improvement in service PMI amid strong wage growth and government support. However, the manufacturing PMI is likely to decline further as uncertainty surrounding US tariffs grows.
China: Industrial profits data under the tariff impact
With the key monthly data behind us, the upcoming week will be quiet in terms of China data releases. May industrial profits data is set to be released on Friday. We will see if tariff impacts will drive profit growth back toward negative levels after two months of positive year-on-year growth in March and April.
Taiwan: Steady industrial production likely to continue
Next week’s data will feature May industrial production, set for release on Tuesday. We expect YoY growth to cool a little after last month’s surprise acceleration to 22.3% YoY, but for growth to continue at a very respectable 16.3% YoY. The information and electronics industry, led by semiconductor production, has been a main driver of industrial production in recent months. This trend is expected to continue.
Key events in Asia next week
Source: Refinitiv, ING
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