East Asia Today

The BOJ's regional report, an important input into the monetary policy process, showed strength in industrial activity and inflation. Korea's August CA surplus rose again, implying higher nominal GDP growth. Far from slowing down, Taiwan's exports in September accelerated again.

Paul Cavey

Oct 8, 2026 • 3 min read

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Korea – net exports v flows

The strength of the current account in August shows Q3 will be another blowout for nominal GDP, improving all Korea's macro ratios. That provides cyclical and structural reasons for KRW strength and relative outperformance of longer-term KTBs. The headwind remains equity outflows.

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East Asia Today

There were a few releases in Japan today that were worth summarising. Taiwan's September CPI data was important, showing inflation remaining firm. Korea's Q2 flow of funds offered another illustration of the broad impact that the chip boom is having on the macroeconomy.

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Taiwan – inflation higher again

Taiwan's price data still don't suggest the economy is overheating. But pipeline pressure is strong, computer prices are surging, indirect energy prices can't be easily controlled by policy, and underlying inflation still looks firm. That all stands out when real interest rates are still negative.