MNI ASIA PAC Weekly Macro Wrap:

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Executive Summary:

JAPAN 

• The Tankan survey pointed to a resilient backdrop but the responses were likely gauged before the auto tariff announcement. Japan household spending slipped back into negative territory. 

AUSTRALIA 

• The RBA left rates unchanged at 4.10% on April 1, as was widely expected. In the press conference, Governor Bullock said that it was a consensus decision and that easing wasn’t part of the discussion. It appears that the RBA is keeping its options open given that risks are to both sides and there is significant uncertainty around the outlook, especially from overseas.
• Australia’s merchandise exports remained soft to much of Asia while strong growth continued to the US and UK. There was a sharp rise in shipments to the US in Q1 as exporters aimed to beat the imposition of tariffs. Australia will face the minimum tariff of 10%, as will NZ.

NEW ZEALAND

• ANZ business confidence eased slightly in March to 57.5 from 58.4, while the activity outlook rose to 48.6, the highest since December. The series are off their Q4 highs but continue to signal that a gradual economic recovery continued in Q1. The price/cost components are trending higher, which will be monitored.

SHORT TERM RATES 

• $-bloc markets have softened sharply as Trump tariff details emerged. 

CHINA 

• China PMI data showed modestly positive economic momentum, with slightly better than expected results for March.  

SOUTH KOREA 

• South Korean data has been mixed. CPI is still close to the BoK’s 2% target. Former President Yoon’s impeachment was upheld, with new presidential elections to be held within 60days.  

ASIA 

• US President Trump announced reciprocal tariffs that will be a minimum of 10%, which was lower than feared, but some major trading partners will be hit badly. Of the 10 main providers of US imports, with the euro area counted as one, 7 are in the Asia region and merchandise exports are important to many of these economies.
• Manufacturing activity posted more moderate growth in March with the S&P Global PMI falling to 50.8, still above January and Q4 average, from 51.5. Growth was driven by Indonesia, Singapore and Vietnam.

ASIA EQUITY FLOWS 

• South Korean outflows surged as Trump announced reciprocal tariffs.