East Asia Econ

China – the end of the flight to safety

Like the actual monthly deposit data, Friday's PBC Q425 depositor survey shows a slowing of the flood of household savings into the safety of bank deposits. The structural deflation pressure caused by the collapse of real estate activity and the chaos of the covid lockdowns is beginning to ease.

Paul Cavey

Jan 26, 2026 • 3 min read

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Last week, next week

Is a ceiling forming for $Asia? Three developments are helpful: CNY fixing strengthening through 7; more US interest in Asia under-valuation; visible concern in Tokyo about weakness in both the JPY and JGBs.

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East Asia Today

The BOJ didn't say much new today, but the authorities overall did make more of an attempt to put a lid on recent market volatility. In Korea, both consumer confidence and house price expectations remain strong. Taiwan retail sales slowed into end 2025, but IP took another step up.

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Japan – Takaichi stresses fiscal responsibility

At its meeting today, the BOJ was again more positive on the outlook, but only incrementally. However, the authorities overall have been trying to put a lid on market volatility, perhaps via intervention, but also an interview by Takaichi. Data, meanwhile, show the economy still has good momentum.