East Asia Econ

East Asia Today

While all the main China Jan-Feb indicators came out today, I think the more important releases were the weekend data showing a further rise in upstream prices, and fx settlement showing continued capital inflows. In Taiwan, wage growth slowed in January, but that is probably holiday related.

Paul Cavey

Mar 16, 2026 • 2 min read

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China – stronger nominal momentum

1) Goods and services output growing ~5% is enough for Beijing; 2) money and credit growth don't suggest a lot of change in that underlying trajectory; 3) nominal momentum is improving, with an end of PPI deflation now a real possibility; 4) the likelihood of further monetary easing is falling.

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Last week, next week

It isn't yet all about the war, given the real strength in semi demand. That backdrop is one reason to think underlying inflation will be lifted by the latest crisis. The durability of the AI cycle will also be the canary in the mine for a negative supply shock becoming a negative demand shock.

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East Asia Today

The annual survey of firm behaviour in Japan's shows the structural rise in inflation expectations is continuing. Today's official February PMI in Taiwan points to higher input prices even before the oil price hit. Like the rest of the region, the PMI also shows strengthening cycle momentum.