FW: AsianBondsOnline Newsletter (4 September 2017)

To read the full report, data and graphs go to
http://asianbondsonline.adb.org/newsletters/abowdh20170904.pdf?src=newslet
ter&id=uWidK3KdmgXVUWes9IgIcqKp1miwxx

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News Highlights - Week of 28 August - 1 September 2017

The Republic of Korea posted a gross domestic product growth of 2.7%
year-on-year (y-o-y) in the second quarter (Q2) of 2017, unchanged from
advance estimates released by the Bank of Korea. This was slightly slower
than the 2.9% y-o-y growth recorded in the previous quarter due to a
smaller increase in gross fixed capital formation and zero growth in
exports in Q2 2017. On a quarter-on-quarter (q-o-q) basis, the Republic of
Korea's economic growth slowed to 0.6% q-o-q in Q2 2017 from 1.1% q-o-q in
the previous quarter.

* On 31 August, the Monetary Policy Board of the Bank of Korea
decided to maintain its base rate at 1.25%. The central bank stated that
domestic growth will remain supported by investments. Monthly inflation is
expected to stay close to the 2.0% y-o-y target level.

* Consumer price inflation in the Republic of Korea rose to 2.6%
y-o-y in August from 2.2% y-o-y in July. After exiting from deflation in
July, Thailand saw consumer price inflation rise to 0.3% y-o-y in August
from 0.2% y-o-y in the previous month. In Viet Nam, consumer price
inflation accelerated to 3.4% y-o-y in August from 2.5% y-o-y in July.

* Industrial production in Japan fell 0.8% month-on-month in July, a
reversal from the 2.2% month-on-month growth posted in June. The shipments
index and inventories index also fell, while the inventory ratio
increased. Industrial production in the Republic of Korea inched up 0.1%
y-o-y in July, a reversal from the 0.5% y-o-y contraction in June. In Viet
Nam, industrial production growth climbed to 8.4% y-o-y in August from
8.1% y-o-y a month earlier.

* The People's Republic of China's (PRC) manufacturing Purchasing
Managers Index rose to 51.7 in August from 51.4 in July due to increased
demand in the consumer goods and high-tech segments, while the
nonmanufacturing Purchasing Managers Index fell to 53.4 from 54.5 in the
same period due to weather conditions negatively affecting the
construction sector.

* Thailand's merchandise exports and imports expanded 8.0% y-o-y and
18.3% y-o-y in July, respectively, with a trade surplus amounting to
USD1.3 billion. In Viet Nam, export and import growth moderated in August
to 13.1% y-o-y and 14.7% y-o-y, respectively. A trade surplus valued at
USD400 million was recorded in August.

* Thailand's current account surplus dipped to USD2.8 billion in
July from USD4.3 billion in June, mainly due to a lower trade surplus in
July. Meanwhile, the services, income, and transfer account slightly rose
to USD1.4 billion in July from USD1.3 billion in the previous month.

* In the Philippines, the Department of Finance is developing the
second package of a comprehensive tax reform program that will plug tax
holiday loopholes granted by investment promotion agencies. The Department
of Finance expects to submit the proposal to the Philippine Congress in
the fourth quarter of 2017.

* In the past week, local currency government bond yields fell for
all maturities in Hong Kong, China; and Indonesia, while it declined for
most maturities in the Republic of Korea, Malaysia, Philippines,
Singapore, and Thailand. Meanwhile, local currency government bond yields
were mostly up in the PRC, and were mixed in Viet Nam. Yield spreads
between 2-year and 10-year maturities narrowed in most emerging East Asian
markets except Indonesia, the Republic of Korea, and Viet Nam.

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