East Asia Today

Underlying inflation in Taiwan is catching up with the Korean run-rate of 2%. The CA surplus in Korea is starting to follow the sharp rise in the surplus in Taiwan. Consumption in Japan is showing stronger momentum.

Paul Cavey

Mar 6, 2026 • 3 min read

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East Asia Today

China's July money data were soft, but not much worse. Terms of trade data for Korea show strong GNI/nominal GDP growth continues. Headline growth in Taiwan is slowing from crazy rates, but domestic demand is stronger. Also, my guide to China's consumer data.

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Taiwan – not over yet

Headline growth rates are slowing, but the government's qualitative assessment remains bullish, there are more signs of life in domestic demand and services, and while a 2026 inflation forecast of a bit over 2% isn't so high, it has been raised four quarters in a row, and is above the policy rate.

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Korea – TOT-led growth continues

The big macro dynamic is the sharp rise in chip prices that is boosting the terms of trade, and thereby lifting nominal GDP and national income. Today's July export and import price data show that these trends remain in place. Rates have priced at least the first stage of this. The KRW still hasn't.