Real gross domestic product (GDP) growth of Japan accelerated to 1.0% quarter-on-quarter (q-o-q) in the second quarter (Q2) of 2017 from 0.4% q-o-q in the first quarter (Q1) of 2017, based on preliminary estimates released by the Cabinet Office. The faster growth was driven by expansion in both private and public demand. Malaysia’s GDP growth sustained its upward momentum in Q2 2017, expanding 5.8% year-on-year (y-o-y), up from 5.6% y-o-y in Q1 2017 and 4.0% y-o-y in Q2 2016. Malaysia’s economy registered average annual growth of 5.7% in the first half of 2017 and Bank Negara Malaysia expects the economy to grow more than 4.8% in full-year 2017. The Philippine economy expanded 6.5% y-o-y in Q2 2017 after a moderation in the earlier 2 quarters. Q2 2017 GDP grew faster than the 6.4% y-o-y growth in Q1 2017, but slower than the 7.1% y-o-y growth posted in Q2 2016. The Philippines remains one of the best performing economies in Asia, with the government aiming full-year 2017 GDP growth of 6.5%–7.5%.
On 16 August, the Monetary Policy Committee of the Bank of Thailand maintained the policy rate at 1.50%. The committee assessed that Thailand’s economic outlook would continue to improve, led by merchandise exports. Domestic demand and headline inflation are poised to gradually rise, tourism is expected to maintain its expansion, and overall financial conditions will remain robust.
Exports from Indonesia climbed 41.1% y-o-y in July after contracting 11.7% y-o-y in the previous month. Imports also rose 54.0% y-o-y following a decline of 17.3% in June. Japan’s exports rose 13.4% y-o-y to JPY6.5 trillion in July from JPY5.7 trillion a year earlier. The rise mainly came from an improvement in exports of transport equipment and machinery, which account for the two largest shares of exports at 24.0% and 20.1% of the total, respectively. Following the 8.8% y-o-y growth in June, Singapore’s non-oil domestic exports (NODX) expanded 8.5% y-o-y in July. The expansion was supported by growth in both electronic NODX (16.3% y-o-y) and non-electronic NODX (5.2% y-o-y).
Malaysia posted a higher current account surplus of MYR9.6 billion in Q2 2017 versus MYR5.3 billion in the previous quarter.
Foreign demand for the Republic of Korea’s local currency bonds strengthened in July, with foreign investors buying a net KRW2,755 billion of listed bonds, up from KRW1,551 billion in June. Cumulative bond inflows for the year through end-July amounted to KRW17,275 billion.
Personal remittances sent by overseas Filipinos grew 6.8% y-o-y in June, reaching USD2.8 billion, the highest level since USD2.9 billion was recorded in March. From January to June, total cash remittances reached USD13.8 billion, a 4.7% y-o-y increase from the same period a year earlier.
Fitch Ratings affirmed Malaysia’s long-term foreign- and local-currency issuer default ratings at A–, with a stable outlook for both on account of resilient economic expansion despite lower oil prices and volatile capital flows, continued account surpluses, and solid external position.
Local currency government bond yields rose last week for most tenors in the People’s Republic of China (PRC); Hong Kong, China; the Republic of Korea, Malaysia and Singapore; while it declined for most tenors in Indonesia, Philippines, Thailand and Viet Nam. Yield spreads between 2-year and 10-year maturities widened for most emerging East Asian markets except for PRC, Malaysia, Singapore and Thailand.