JPMorgan Chase: High oil prices may trigger tightening of monetary policy in Asia.

According to Mars Finance, on March 12th, JPMorgan economists stated that persistently high oil prices may push some Asian central banks to adopt a more hawkish monetary policy stance. The recent surge in crude oil and natural gas prices has constituted a trade shock to many economies in the region. They noted, "Throughout the region, fiscal policy is likely to become the first line of defense against the shock to households." They stated that rising oil prices will increase the likelihood of Singapore and Malaysia tightening policies, while reducing the likelihood of Indonesia and the Philippines cutting interest rates. Their analysis suggests that whether the Bank of Korea will raise interest rates as a result will depend on whether the oil-price-driven shock persists and is sufficient to affect inflation expectations and have a second-round effect on core inflation. (Jinshi)