Asian PMI Slows Down Weaker Demand Will Hit Inflation

Factory activity stumbled across much of Asia in September, with slowdowns in India, Japan and Taiwan and an outright decline in South Korea delivering a setback to hopes for a pick in world growth this year.

The lackluster performance helped lift the U.S. dollar above 110.00 yen for the first time since mid-2008 while punishing commodity prices globally, a positive for consumers but also a force for disinflation.

Indeed, subsiding price pressures was a feature of many of the manufacturing surveys out on Wednesday. Even Taiwan, one of the stronger economies in the region, reported output prices were cut for the eighth month in a row, while input inflation was the lowest in over a year.

 
“This should give the authorities plenty of room to keep policy accommodative to support growth,” said HSBC economist, John Zhu, a conclusion that goes for plenty of other countries.

via Reuters

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza