Consumer confidence dipped in March. That drop came after a big rise from mid-2025, and in level terms confidence is still strong. The dip does come, however, as general price expectations start to rise, which might be capturing the impact of the rise in energy prices.
High-frequency data through the first 20 days of March show that China this month might see the first positive PPI inflation print since September 2022.
YoY growth in retail sales has picked up through February, but that is base effect –the volume of retail sales in level terms isn't moving much at all. The clear driver of Taiwan's economy continues to be exports and industry. IP once again rose strongly in February.
February PPI points to CPI inflation heading higher. The driver wasn't goods prices, with the impact of the Middle East conflict only likely to show up from March. Rather, it is services PPI that has been picking up.
Korea's semiconductor exports continued to rise in the first 20 days of March, and have now more than doubled since September. That, in turn, is continuing to push up the trade surplus. That will change as energy imports start to rise.
China has now released most of its detailed trade data for January and February. The apparent logic of releasing the data for both months at the same time is to lessen the confusion from the big swings in the data for any one month caused by Chinese New Year.
YoY growth in export orders fell in February, but that was base effect. In level terms, orders actually rose, with strength in the US offsetting the ticking down in orders from elsewhere. This suggests that the outlook for exports remains firm.
The strength of services activity has been one of the stand-out features of this cycle in Japan, and one driver of that has been the rise in inbound tourism.
Uncertainty from the Middle East also featured in the quarterly monetary policy meeting of Taiwan's central bank today. But the dominant theme was strong economic growth and still modest inflation. The bank kept rates unchanged, saying that after taking into account
As expected, the BOJ didn't change policy or its baseline outlook today. However, events in the Middle East were added as a risk in the bank's short statement.
The usual dynamic in the labour market was maintained again in February, with employment ticking up, largely because of job creation in the government and social service sectors. That pushed down the unemployment rate, even though there was once again another big rise in female participation.
I have been less pessimistic than the market consensus on recent dynamics in Japan's fiscal position. Two of the reasons for this view can be seen in today's quarterly flow of funds: the fiscal deficit remains close to the lowest level since the late 1990s, and while government liabilities are…
Wage growth slowed in January. For total wages, there is an obvious distortion because of Chinese New Year: the government notes that year-end bonuses, which in 2025 were paid in January, have this year been distributed over both January and February.
Taiwan's official PMI for February was finally released today, and like the S&P version, improved again. Before the Iran war then, the manufacturing cycle was gaining strong momentum.
After showing a bit more stability into the end of last year, the job openings ratio declined anew in January. It would, however, be surprising if the labour market really was taking a new step down, given multiple signs that the broad economy has bottomed.
The Cabinet Office and MOF today released the Q1 business outlook report. This is useful, as it gives a sense of the likely tone of the bigger Tankan survey from the BOJ that will be released in early April.
Exports in the first 10 days of March were strong, rising more than 20% YoY. The big driver continues to be semiconductors. Also notable is the rise in exports to China. This is all in line with trends in recent months.
Import prices rise in February, but only slightly. So, at least before the Iraq war, there weren't signs that PPI inflation was about to accelerate. Given that, the most likely path is for CPI inflation to moderate.
TSMC sales dipped in February. The relationship between the firm's revenue and Taiwan exports has weakened in recent months, and as of now, I don't know why. Taiwan does produce some memory chips, and so is benefiting from the surge in DRAM prices. But output is still small compared with foundry.
Today's final Q4 GDP data were revised up to -0.3% QoQ from -0.2% QoQ in the first estimate. Real GNI growth was, however, rather better, at 1.6% QoQ, or over 3% on an annual basis.
Taiwan exports dipped in February, but that isn't so surprising given last month's Chinese New Year. The government's leading indicator improved again in January, but the same warning applies: that improvement might reflect distortions caused by the holiday.
Before the Iran war, Japan's cycle was shaping up well. Today's EW survey showed sentiment improving again in February, with the post-tariff bounce in manufacturing confidence improving. In addition, bank lending continues to look strong.
The headline rise in CPI in February was all because of the impact of Chinese New Year, manifested most clearly in the surge in entertainment prices. Energy prices aren't having an impact yet, but that will likely change, and even before then, there are signs of some inflationary pressure.
The two potential drivers of a better cycle in Japan in 2025 are (or were) lessening inflation supporting stronger real consumption, and stabilisation of tariffs supporting exports. Data today give more support for the first:
Growth in Taiwan export orders accelerated again in January to 60% YoY, the fastest in 15 years. Given the holiday, we need data for February to get a truer sense of underlying growth in exports. That said, it is interesting that orders from all regions grew.
