China's exports finished 2025 on a high, driven in part by a real surge in auto shipments. As a result, China's trade balance in transport equipment, which as late as 2019 was in deficit, has now become a surplus of over USD20bn a month.
Yesterday's data for December showed loan growth reaching 4.8% YoY. Outside of the policy-boosted growth during the covid pandemic, that's the strongest since the 1990s.
As in the other economies, Japan's current account surplus in widening, reaching over 6% of GDP in the three months to November, bigger than any time since the 1990s. The composition of Japan's surplus is, however, different from elsewhere, being more driven by the income surplus.
Today's November earnings data continue to show a tight labour market, with manufacturing overtime remaining elevated. That tightness has been feeding into a gradual acceleration in wage growth. That is most obvious in manufacturing, but is also apparent as an economy-wide phenomenon.
Export growth in the first 10 days of January was soft, with the strengthening of semi shipments offset by weakness in other products. The 10-day data do tend to be volatile, particularly at the beginning of the year.
Data for December show the monetary base continuing to decline as the BOJ tapers new JGB purchases, while redemptions rise. Relative to GDP, the monetary base is now smaller than any time since 2020 – but still leaves it four times larger than before Kuroda took office in 2013.
Today's Q3 flow of funds data show that from a savings-investment perspective, the rise in the current account surplus is increasingly driven by household savings. That this surplus hasn't stopped KRW depreciation is because of outflows into foreign assets.
Full-month data show PBC liquidity injections remained strong in December. Given that, it is reasonable to assume that central bank lending to the financial sector will have increased again.
By most global standards, inflation in Taiwan is low, with both headline and core easing in 2025 to finish the year at close to 1.5% YoY in December. However, that is already higher than the near zero rate of core inflation experienced in the 20 years before 2020.
The services PMI softened in December, but I doubt that marks a change in direction for the cycle. Other surveys have been strong, with non-manufacturing in the monthly Reuters Tankan in particular jumping last month.
Like the KRW, the TWD was also weakening in 2H25. However, after the sharp appreciation in Q225, a pull-back would have been what policymakers in Taipei would have wanted to see.
Especially in 2H25, the BOK had two big financial concerns: rapidly rising house prices, and a weakening currency. The final weeks of last year showed some lessening of pressure on the currency.
Some of the positive monetary developments of recent months cooled in November. Today's fx settlement data point to a slowing of capital inflows, and the demand:time deposit ratio in the household sector dipped down.
The tone of the slide released after today's monetary policy meeting was constructive:
Round two of China's trade release for November give more details on this year's re-acceleration of auto exports. The driver is clearly exports of hybrids, which have risen from a run-rate of USD1bn at the beginning of this year to USD4bn.
In what wasn't a surprise to anyone, Taiwan's central bank, the CBC, kept interest rates unchanged at its quarterly monetary policy meeting today. The bank forecasts that growth will slow in 2026 from this year's boom of 7.3%, but will remain respectable at 3.7%.
The political troubles with China haven't yet had a big impact on Japan's tourism industry. Arrivals from China did drop in November, but total tourist numbers remain strong.
15 years ago, China was by far the biggest destination for Taiwan's FDI. But in the first eleven months of 2025, FDI into China totalled just USD1.4bn, down more than 60% YoY. In the rest of the world, Taiwan's investment this year has reached USD36bn.
The relative strength in non-manufacturing seen in the Tankan was also evident in other releases today. First, tertiary activity in October rose again, and excluding the spike before the sales tax hike in October 2019, is at an all-time high.
There's been plenty of commentary about the communiqué from the Central Economic Work Conference. Domestic demand was again made the top target, and the usual talk of risks came lower down the list of priorities. That is encouraging, but unlikely to signal a huge change in economic policy.
Import prices are rising, but that is mainly because of the depreciation of the KRW, and so far, the change hasn't been big enough to suggest real upside risk for domestic inflation. Export prices are rising more.
For any monetarists, Japan's policy settings might be starting to look quite tight, with base money growth contracting at the steepest rate since 2007. But paring back the balance sheet is a deliberate BOJ choice; what matters for the bank is how far its policy rate is below inflation.
Korea's trade data for the first ten days of December show export performance being flattish so far this month. It wouldn't be wise to read too much into that – as might be expected, the data for the first ten days of each month tend to be noisy.
Today's quarterly Business Outlook Survey from the MOF and Cabinet Office is the warm-up act for the much bigger Tankan survey from the BOJ that will be released on December 15th.
Headline wage growth reached 3.8% YoY in October, a growth rate that's only been exceeded once since the early 2000s. The data are noisy, but the underlying trends look firm, with signs that trend growth is taking a new step-up. That is led by manufacturing.
