Asia week ahead: Japanese rate decision and data from South Korea, China, Taiwan, Australia

The Bank of Japan will stand pat despite the sizzling inflation amid uncertainty surrounding the US trade policy. However, the BoJ will signal additional interest rate hikes in the coming months.

South Korea’s monthly activity data is expected to contract based on weaker-than-expected first-quarter GDP and falling construction and equipment investment. Also, early April trade data suggests that full-month exports will drop thanks to direct and indirect US tariff impacts. Imports should drop even faster, keeping trade balance in surplus. Meanwhile, inflation is expected to rise modestly to 2.2% year on year. Gas prices declined, but manufactured food and services costs probably rose.

China releases industrial profits data on Sunday, offering markets a read on whether profits returned to positive territory following a -0.3% YoY contraction in the first two months of the year. China’s official and Caixin PMIs will both be released on Wednesday, providing our first look at how tariff actions impacted the manufacturing sector.

Taiwan releases its 1Q25 GDP data on Wednesday. We’re looking for growth of around 3.3% YoY. Taiwan’s economy is likely to have been supported by some import frontloading from US customers.

Australia’s consumer price index could offer a mixed picture on a quarter-on-quarter basis in the first three months of the year. Overall, the CPI is likely to edge higher on rising food and electricity costs, despite some correction in prices for services.