East Asia Econ

East Asia Today

Today's headline Q4 GDP data for Japan were weak, but the details were better, and the 2026 outlook remains better. The weekend's high-frequency price data for China – the last release before the holiday – indicates the lessening of PPI deflation continued through the first 10 days of February.

Paul Cavey

Feb 16, 2026 • 2 min read

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Japan – GDP details better than headlines

Growth in Q4 was only +0.1% QoQ, but that was partly because of a running down of inventories. Underlying demand was better, and given the strength of business and consumer confidence, the outlook for growth in 2026 is more positive.

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Last week, next week

Three themes from last week: improving terms of trade, led by rising export prices; expanding current account surpluses; and growing optimism about the sustainability of AI-related hardware demand that is critical for cycles in Taiwan and Korea. Also, happy year of the (fire) horse.

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East Asia Today

Lots of data releases across the region today. Two themes stand out: 1) Rising CA external surpluses and inflows, with the latest indicators coming from China and 2) improving terms of trade, seen in Korea's export/import price data for December, and Taiwan's Q4 GDP release.