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.