MNI ASIA PAC Weekly Macro Wrap:

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Executive Summary:

JAPAN

• Japan’s Tokyo March CPI print came in stronger that forecast, with solid details in terms of the core/services components. The BoJ remains cautious around the outlook though, given heightened US/trade uncertainties. 

AUSTRALIA 

• The FY 2026 budget was an election budget that included sweeteners for voters with the main surprise a 1pp cut in the lowest tax rate. The fiscal and economic projections though are little changed with the material deficit revisions made in December’s MYEFO.
• Inflation news since February has been broadly consistent with underlying inflation returning sustainably to the band though but there were tentative signs that labour costs are becoming sticky.
• The S&P Global preliminary March composite PMI showed that growth in activity picked up at the end of Q1 with the index rising to 51.3 from 50.6 in February and 51.1 in January. 

SHORT TERM RATES 

• $-Bloc markets are little changed over the past week, despite tariff headlines. 

CHINA 

• China data has been light this week, just with industrial profits on tap. PMIs print next week. 

SOUTH KOREA 

• Sentiment readings for both consumer and the business side suggest a soft domestic demand backdrop. 

ASIA 

• Indonesian markets have been in focus this week amid equity market volatility and USD/IDR rising to levels last seen in 1998 (during the Asian Financial Crisis). Fiscal spending concerns, along with BI’s independence outlook are among the factors weighing on sentiment. 

ASIA EQUITY FLOWS 

• India inflows have been a positive, while outflow pressures from Taiwan have resumed. 

GLOBAL 

• US President Trump signed an order for 25% tariffs on imports of all non-US-made automotives including light trucks to come into effect on April 2. Parts have been delayed until May 3 at the latest. In 2024, the US imported around half of the total autos sold with 32.2% of shipments coming from Mexico followed by 16.3% from Japan and 15% from Korea. Canada was fourth accounting for 12.8%. Asia is also a major provider of auto parts to the US.
• Numerous Asian countries have deficits with the US including Japan, Korea, Taiwan and India, and many have higher average tariffs. As a result, they have been nervously waiting to see if they will be next following measures against China.