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Central bank meetings

The Bank of Japan (April 28): The BOJ is expected to keep its policy rate unchanged at 0.75% at this meeting, while signalling readiness to hike rates at the next meeting in June. With uncertainties in the Middle East still lingering, the BOJ is likely to adopt a cautious stance and refrain from an imminent rate increase. Expectations for a hike at this meeting have also eased after Governor Kazuo Ueda provided no clear signals during his remarks in Washington earlier this month. A rate hike at this meeting could surprise markets and trigger unintended volatility in JPY assets.

We continue to expect the BOJ to raise rates to 1.00% by mid-year, potentially as soon as the June meeting. By then, Middle East-related uncertainties may have subsided, offering greater clarity on Japan’s growth and inflation outlook. Meanwhile, a more complete set of Shunto wage negotiations data will be available, giving the BOJ greater confidence that underlying inflation momentum remains sustainable.

Bank of Thailand (BOT) (April 29): We expect the BOT to maintain its benchmark policy rate at 1.00% during its upcoming meeting on April 29. BOT Governor Vitai Ratanakorn signalled on April 9 that the central bank intends to keep interest rates at the current level “for as long as possible”. While Thailand’s headline inflation will likely accelerate due to global energy price spikes linked to supply disruptions in the Strait of Hormuz, the BOT thinks that interest rate hikes would have limited effectiveness in dampening supply-driven inflation and would risk undermining demand in the fragile economy. Consequently, policymakers will likely look through the initial oil-driven inflation shock at the upcoming decision and adopt a wait-and-see approach, also considering the downside impact to economic growth, amid the highly uncertain Middle East conflict.

European Central Bank (April 30): ECB policymakers have pushed back on rate hike expectations in April in recent weeks, even as markets were pricing in the possibility of a frontloaded move to rein in price expectations. Unlike the previous oil crisis in 2022 when the ECB normalised rates upon surfacing from an easier policy stance (arguably action should have been expedited), the benchmark rate stabilised at a more neutral level of 2% (deposit facility rate) in this cycle. Incoming PMIs and sentiment indices have been on the weaker end of trend. We expect the Governing Council to lean towards a pause on rates in April, while monitoring the lift-off in inflation after March’s reading tested past target to rise by 2.6% yoy. If the Strait of Hormuz blockade extends into this quarter, markets are likely to factor in a potential move at the June meeting as a pre-emptive step.

Forthcoming data releases

China: PMI is expected to remain resilient at around 50.4 in April, supported by improving high-frequency industrial indicators, including rising utilisation rates in cement and steel production. While the oil shock continues to weigh on energy-related sectors—evident in weaker operating rates at petroleum asphalt and PTA plants—spillover to broader manufacturing remains limited. Meanwhile, external demand shows early signs of stabilisation, with port throughput and international cargo activity edging higher, suggesting a modest recovery in trade momentum.

South Korea: April trade data this week will likely show exports remaining strong at above 40% yoy, supported by robust global AI demand and surging memory chip prices. Meanwhile, the trade balance is expected to maintain a substantial surplus of USD 26bn, as solid export growth offsets rising import bills amid higher global energy prices. Strong export and trade balance figures should help alleviate concerns about the impact of an oil price shock on South Korea’s economy and KRW assets.

Taiwan: The preliminary estimate for 1Q GDP will likely show strong growth of 10.7% yoy, close to the 12.7% recorded in 4Q25. Exports maintained robust growth of 41.5% yoy in real terms during 1Q, near the 46.6% seen in 4Q25, supported by continued strength in AI-related demand and easing US tariff pressures. Private consumption has improved, as reflected in retail sales, consumer confidence, and property transactions, aided by the government’s cash handout programme and the central bank’s selective easing of credit controls. We remain confident in our full-year GDP growth forecast of 7.0%, with AI-driven export strength expected to offset the adverse impact of higher energy prices on domestic demand.

Hong Kong SAR: Export growth is set to normalise sharply from 24.7% yoy in February to around 10.0% in March, broadly tracking the cooling in Mainland trade momentum. While part of the deceleration reflects base effects, China’s export growth also slowed materially from 39.6% to 2.5% amid disruptions linked to Middle East tensions. That said, the downside appears contained—Chinese electronics exports remain resilient, and with the segment accounting for nearly 70% of Hong Kong’s re-exports, it should continue to anchor overall trade performance.

Singapore: We expect a volatile rebound in Singapore’s industrial production (IP) to 10.0% yoy growth in March 2026, reversing the slight 0.1% yoy contraction in February 2026. The decline in February was due to temporary shutdowns during the Lunar New Year festive period that largely normalised in March. IP expansion continued to be supported by robust momentum in electronics production, benefitting from sustained global artificial intelligence (AI)-related tailwinds, as reflected in the acceleration of electronics domestic exports to 74.0% yoy in March. Nonetheless, performance across manufacturing clusters was likely uneven, with the chemicals and general segments facing challenges, partly due to energy supply disruptions and rising input costs associated with the Middle East conflict.

Vietnam: Vietnam’s economic data for April 2026 likely reflected supportive export performance alongside elevated inflation. We expect goods exports to have continued growing by 15.0% yoy in April, extending the strong 20.1% yoy expansion in March. This was likely driven by still-favourable external demand, particularly for semiconductors, benefitting from positive spillovers associated with global AI-related tailwinds. However, there were early indications of upside cost pressures from energy and raw material inputs. We anticipate headline inflation to have remained elevated at 4.2% yoy in April, following its acceleration to 4.7% yoy in March. Transport inflation likely stayed high, as global and domestic fuel prices remained above pre-Iran war levels, despite some pullback amid hopes of de-escalation. The uptick in inflation likely eroded consumers’ purchasing power, possibly dampening the momentum in retail sales.

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