Asia Week Ahead: China GDP, BI Decision, and Japan Inflation in Focus

MT Newswires
07-14

For the week ahead in Asia, the economic calendar is filled with key data releases and central bank decisions across the region.

The week kicks off with China's June export data, along with GDP figures from Singapore, inflation numbers from India, and Japan's machinery orders.

On Tuesday, China will release a batch of closely watched indicators, including second-quarter GDP, retail sales, industrial output, and housing prices. India's trade figures are also on the schedule.

Wednesday features a policy decision from Bank Indonesia, as well as South Korea's labor data and Japan's Tankan business sentiment survey.

Thursday brings trade figures from Japan and Singapore, along with Australia's unemployment rate.

On Friday, Japan's national inflation data and Malaysia's trade figures are due. The People's Bank of China will announce its loan prime rate decision on Sunday.

Here's a day-by-day look at what's happening in Asia this week.

MONDAY, July 14

A wave of economic data from Asia released Monday offers fresh insight into the region's growth momentum and global trade dynamics.

China's exports rose more than expected in June, buoyed by a tentative agreement between Washington and Beijing to ease steep tariffs.

Data from the General Administration of Customs showed Chinese exports grew 5.8% year-on-year, beating the 5% increase forecast in a Bloomberg survey. Imports climbed 1.1%, surpassing expectations for a 0.3% rise and marking their first increase this year.

"Growth in export values rebounded somewhat last month, helped by the US-China trade truce," Zichun Huang, China economist at Capital Economics, was quoted by AFP as saying.

"But tariffs are likely to remain high and Chinese manufacturers face growing constraints on their ability to rapidly expand global market share by slashing prices," Huang added.

Meanwhile, Singapore's economy expanded 4.3% year-over-year in the second quarter, outpacing the 4.1% growth recorded in the first quarter, according to advance estimates released Monday by the Ministry of Trade and Industry.

On a seasonally adjusted quarter-on-quarter basis, Singapore's GDP grew 1.4% in the April to June period, rebounding from a 0.5% contraction in the first quarter.

Following a solid first-half performance, with GDP growth averaging 4.2% year-on-year, analysts were cautious about the outlook for the rest of the year amid uncertainty over U.S. tariffs.

"External headwinds are expected to exert significant pressure soon," wrote economist Sheana Yue of Oxford Economics in a note, adding that the "biggest challenge" will come from U.S. trade policy.

Also on deck are India's inflation data. Consumer prices eased for the eighth straight month, sliding to 2.1% in June from 2.8% in the month prior and below market forecasts of 2.5%.

The decline was largely driven by a 1.06% fall in food prices, the first annual drop since 2019.

In addition, Japan's machinery orders slipped 0.6% month-over-month in May, easing from April's steep 9.1% decline and beating market expectations for a 1.5% drop.

TUESDAY, July 15

China's economy likely grew 5.2% year-on-year in the second quarter, slightly below the 5.4% expansion in Q1, according to a Wall Street Journal poll of economists.

The same poll forecasts a slowdown in retail sales, with June growth easing to 5.6% from 6.4% in May.

Industrial production is expected to have risen 5.6% in June, down marginally from 5.8% in the preceding month, according to estimates from ING Bank. Meanwhile, fixed asset investment likely grew 3.6% in the first half of the year, nearly unchanged from the 3.7% pace in January to May.

ING economists also pointed to the upcoming housing price data as a key indicator. They said it will help clarify whether the steep declines seen over the past two months were part of a deeper downturn or just temporary. "Another month of sizable price declines could necessitate more real estate stimulus," ING said in a note.

Other key data due Tuesday are India's trade numbers and Australia's consumer confidence.

WEDNESDAY, July 16

Bank Indonesia will deliver its policy rate decision midweek, with economists divided over the likely outcome.

Consensus leans toward a 25 basis-point rate cut, supported by the rupiah's relative stability, according to economists at Barclays. However, the decision remains finely balanced, with ongoing uncertainty over U.S. trade policy potentially prompting BI to hold steady.

ING economists, on the other hand, expect the central bank to keep its benchmark rate unchanged at 5.5% this month, citing persistent tariff concerns as a key reason for caution. While the broader macro environment favors easing, policymakers may choose to wait, ING said.

Elsewhere in the region, South Korea will release export prices and unemployment data, offering further insight into the country's external and labor market conditions.

In Japan, Reuters is set to publish the Tankan Index, a key measure of business sentiment closely watched for signs of confidence among the country's major manufacturers and non-manufacturers.

THURSDAY, July 17

Japan's trade figures, due Thursday, may show a further slowdown in exports in June after a 1.7% fall in May from a year earlier, according to WSJ.

Singapore's June non-oil domestic exports data will be closely watched for signs of continued weakness following May's decline, as U.S. trade uncertainty continues to weigh on global demand.

Down Under, markets will be watching Australia's latest unemployment figures and consumer inflation expectations.

Australia's jobless rate likely held steady at 4.1% in June, CommBank Research said in a note, penciling in a +20k rise in employment and a participation rate of 67.0%.

Similarly, Hong Kong will release its unemployment numbers.

FRIDAY, July 18

Japan's June inflation figures will be in focus, with earlier Tokyo data suggesting a slight cooling in both headline and core measures. However, inflation likely remained well above the BOJ's target.

Headline CPI is expected to have eased to 3.3% in June from 3.5% in May. Core consumer prices, which exclude fresh food, are forecast to have risen 3.3% year-on-year, down from 3.7%, according to Morgan Stanley estimates.

Also due Friday are Malaysia's trade figures, which will provide further clues on regional export momentum amid global uncertainties.

SUNDAY, July 20

The People's Bank of China is anticipated to keep the one-year and five-year loan prime rates unchanged at 3.0% and 3.5%, respectively.

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