MNI ASIA PAC Weekly Macro Wrap

Download the Full Report Here 

Executive Summary:

JAPAN 

• Japan core machine orders for February were stronger than expected. The y/y pace remains well off late 2024 highs above 10% thought. The softer machine orders pace is still implying further easing in capex momentum.
• BoJ Governor Ueda has commented to local newspaper Sankei, noting the central bank will have to monitor the tariff impact and may need to respond if the economy is impacted.
• The trade surplus with the US was ¥847bn, little changed from Feb levels and a likely key discussion point at Wednesday's (US time) trade discussions between Japan and the US. 

AUSTRALIA

• On average indicators suggest that labour market conditions were little changed over Q1 compared to Q4 and that they remain tight. Employment rose 32.2k in March while the unemployment rate was little changed at 4.05%.

NEW ZEALAND

• Q1 inflation printed higher than expected at 0.9% q/q bringing the annual rate to 2.5% up from 2.2% in Q4. There was a pickup in both the tradeables and domestically-driven non-tradeables components, which is likely to mean that the RBNZ will continue easing in 25bp increments.
• The RBNZ’s measure of core inflation eased 0.1pp to 2.9%, within the target band.

SHORT TERM RATES

• RBNZ dated OIS pricing is flat to 2bps firmer across meetings after the release of Q1 CPI data. The market is pricing 27bps of easing, with a cumulative 78bps by November 2025.

CHINA

• China’s economy outpaced growth expectations in the first quarter, prior to an imposition of tariffs.China’s GDP for the first quarter rose +5.4% y/y ahead of market consensus for a +5.2% y/y increase.
• China’s exports in USD terms outpaced estimates for March. Up in USD terms +12.4%, the result dramatically exceeded +4.6% estimates and the -3.0% February contraction.

SOUTH KOREA

• As forecast, the BOK left rates unchanged at 2.75% with five out of six members voting to keep rates on hold today in what was seen by the market as a close call.
• Korea’s Deputy Prime Minister and Finance Minister Choi has proposed an increase to the already additional budget to KRW12tn (US8b) to support key industries that will suffer from the trade war and to respond to the recent natural disasters.

ASIA

• India’s CPI y/y for March moderated further to +3.34% from +3.61% in February. Authorities will be pleased that food prices eased to +2.69%, from +3.75% in February.

ASIA EQUITY FLOWS

• After eight straight trading days of meaningful outflows totaling nearly $4bn, India finally had a significant inflow on the 15th as Korea’s outflows year to date top $12bn and Taiwan tops $19bn.