Asia Week Ahead: Japan And South Korea Inflation, China PMI Data

2026-03-28 12:32:02

(MENAFN- ING) Asia Research highlights of the week

New Bank of Korea governor may deliver rate hikes sooner than anticipated
Japan's soft inflation is temporary and won't alter BoJ's rate hike cycle

Japan: CPI expected to remain stable

Markets will focus on Tokyo's consumer price index inflation. Both headline and core inflation are expected to remain stable in March. Rising gasoline prices should be offset by government utility subsidies and steady food costs. Industrial production and retail sales are expected to decline in February, partially reversing strong gains in January.

South Korea: Growth expected in first quarter despite increasing risks

While data is likely to indicate that Korea continued to expand in the first quarter, the outlook remains uncertain. Exports are projected to surge by nearly 50% in March, driven by strong chip sales. Global oil supply issues have not yet affected chip production or demand, but ongoing chip shortages should push prices up firmly. Imports are expected to rise as well. This is partly due to higher commodity prices, though the recent surge may not fully show up in the March data. Industrial production and retail sales are projected to show improvement in February. Still, risks for the upcoming quarter are increasing, as evidenced by softening sentiment. We expect the manufacturing PMI to drop below 50.

China: PMI expected to climb back into expansionary territory

China releases its March PMI data. The official National Bureau of Statistics manufacturing and non-manufacturing PMIs are out on Tuesday. We expect the manufacturing PMI to return to 50.0 in March, up from 49.0 in February. This survey has been in contraction territory for 10 of the past 11 months. So, a move to 50 or above would be welcome news. The RatingDog manufacturing PMI is out on Wednesday. We expect its streak of outperformance versus the NBS indicator to continue.

Key events in Asia next week

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