Economic and strategic ties will force Japan and China to smooth over recent political tensions. Inflation looks to have eased in Thailand, but higher food and core prices have heightened inflationary pressures in Indonesia and South Korea. Next week's data should show that intra-Asia trade kept Hong Kong's and Indonesia's exports from slowing significantly in August. Better-than-expected export orders and labor market data suggest that Taiwan will hike rates at the Q3 monetary policy meeting.
Japan-China Relations: Strategic Competition and Currency Frictions