East Asia Econ

East Asia Today

A few data releases today: inflation in China; economic sentiment, bank loans and BOP in Japan; foreign trade and monitoring index in Taiwan. The lessening of deflation in China is an underlying change. The other data are distorted by the Chinese New Year, and will now be shifted by the Iran war.

Paul Cavey

Mar 9, 2026 • 2 min read

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China – the end of deflation

Deflation momentum continued to lessen in February, a trend that will now be given a further boost by global oil prices. But with this shift in the direction of deflation being driven by external factors, it isn't based on the sort of improvement in domestic growth that is needed for sustainability.

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Last week, next week

With activity and inflation in East Asia picking up before the war started, the extra push to prices from the conflict will be important for the near-term policy outlook if tensions subside quickly. Right now, the bigger risk seems to be a real supply shock that causes a demand shock too.

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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.