Asia Economics Comment Manufacturing barrels ahead, for now

Research evidence excerpt

Asia Economics Comment Manufacturing barrels ahead, for now

29 June 2026

Asia Economics Comment Economics

Manufacturing barrels ahead, for now Asia

Another week, another slew of powerful manufacturing data. Sure, AI stocks Frederic Neumann

have been, well, a bit wobbly of late, but Asia’s electronics supply chains are ChiefGlobalAsiaResearchEconomist,Asia Co-head

bursting at the seams. Demand for computing hardware, and related stuff, is TheBankingHongkongCorporationand ShanghaiLimited

still relentlessly driving activity and trade across much of the region. This week, fredericneumann@hsbc.com.hk+852 2822 4556

Asia’s PMIs, and export data from Korea and Vietnam, will likely show unabated

strength. Japan’s Tankan should also show robust capex intentions – another

sign that the economy is seemingly shaking off the energy shock. But pick-ups

in inflation, including at the core level, in Korea, Indonesia, and Sri Lanka are set

to keep the case for monetary tightening alive, even if oil prices have plunged.

In fact, in much of the region, worries about El Niño are moving front and centre.

The AI hardware boom continues unabated. PMIs across much of Asia this week should highlight the ongoing

manufacturing boom. Industrial production in Korea and Japan, for example, likely rose strongly in May, with

the output in the latter expected to have risen by 1.5% m-o-m sa, thanks to robust production of cars and

chip-making equipment (India may show an acceleration, too).

In Japan, the main highlight this week will be the quarterly Tankan survey. This may show that corporate

Japan barely missed a beat in recent months, with the economy seemingly unaffected by the energy shock

(thanks, in large part, to energy subsidies). The case for another rate hike by the BoJ this year thus remains