If this week's stronger-than-expected economic growth data from South Korea is anything to go by, the next move in interest rates in Asia's fourth-biggest economy could be up instead of down.
Data released on Thursday showed South Korea's gross domestic product (GDP) rose 3.9 percent on-year in the first quarter of 2014. That was above market expectations for a 3.8 percent rise and a 3.7 percent increase in the final quarter of 2013.
"Stronger demand from developed markets offset weaker demand from China, keeping the Korean economy on track for a gradual export-led recovery," HSBC Economist Ronald Man said in a note.
"Pressure on the Bank of Korea to deliver an additional rate cut will likely dissipate, and we expect the next policy rate move by the central bank to be a 25 basis point hike from as soon as the third quarter of 2014," he added.
A tightening cycle in the Asia-Pacific is already under way, with New Zealand's central bank on Thursday hiking its key interest rate for a second straight month. New Zealand was the first major developed economy to start tightening monetary policy in the current economic cycle. Developing economies such as India have lifted rates in recent months to stem inflation.