East Asia Econ

East Asia Today

The latest Middle East war might change everything again. But before the latest conflict, Asia's manufacturing cycle was accelerating. That's clear with the chip-led export surge in Korea in February, and the stronger manufacturing PMIs for Taiwan and Japan.

Paul Cavey

Mar 2, 2026 • 2 min read

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Last week, next week

The big theme in focus last week was current account surpluses, which across the region are both large and structural. There will be some downside risk if the latest problems in the Middle East cause oil prices to spike. Otherwise, the surpluses remain a fundamental reason for currency appreciation.

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East Asia Today

A few secondary data points in Japan: Tokyo CPI, retail sales and IP. Also, with both Korea and Taiwan releasing January data, a couple of charts on tourism. Finally, just to let you know that I am travelling the next couple of weeks. The daily will still appear, but there might be some disruption.

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Japan – lower headline CPI, stronger retail sales

My framework for this year is an easing of tariff and price shocks that give a boost to domestic activity. Today's February data for Tokyo show the fall in headline inflation in January is persisting. Retail sales in January did jump, but these data can be noisy. IP is trending up, but slowly.