East Asia Econ

East Asia Today

This cycle in Japan continues to stand-out for the strength in services activity. In Korea, export prices rose in February. Import prices will now increase more quickly, but the net impact of the energy price shock will depend on whether the surge in semiconductor demand and prices now holds or not.

Paul Cavey

Mar 17, 2026 • 2 min read

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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.

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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.