MNI Asia Pac Weekly Macro Wrap:

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Executive Summary:

JAPAN 

• This week’s Japan inflation data should add to the BoJ’s confidence around achieving its 2% inflation target. Still, next week’s BoJ meeting is likely to see the central bank firmly on hold given tariff/trade uncertainty. 

AUSTRALIA 

• The S&P Global flash April PMIs showed steady but moderate growth at the start of Q2 but strength was driven by the domestic economy though with global trade developments weighing on exports & confidence.
• There are high correlations between NZ and Australian CPI data and given NZ’s Q1 has already been released, there are possibly trends that we can ascertain. Australia may see a pickup in goods inflation, while sticky services may moderate when its Q1 data prints on April 30.
• If the actual election result comes in close to the polls, which are currently around the 2022 outcome, then Labor could hold its small majority in the House of Representatives but trends are unlikely to be uniform across seats and the risk of a minority government remains high.

NEW ZEALAND

• NZ recorded its third merchandise trade surplus in four months in March at $970mn up from $392mn. Both export and import growth were robust. Trade is a bright spot in NZ’s struggling economy but with a 10% tariff on goods to the US and an escalating US-China trade war the outlook is highly uncertain.

SHORT TERM RATES 

• Rate expectations across the $-bloc have remained broadly unchanged through December 2025 over the past two holiday-affected weeks. 

SOUTH KOREA 

• South Korean Q1 GDP printed under market expectations, with q/q at 0.2% versus 0.1% forecast, which was also the prior outcome. The y/y print was -0.1%, below the consensus forecast of flat (prior was +1.2%). This was the first q/q decline since Q2 of last year. For y/y, it was the first decline since the end of 2020. The BoK has recently noted the economic outlook had deteriorated.
• Earlier the consumer sentiment reading for April printed. It nudged up to 93.8 from 93.4. We are up from late 2024 lows sub 90.0 for the index, but for much of the prior 12 months we were above 100, so consumer confidence is still to return to these levels.
• South Korea's first 20 days exports declined in April 5.2% YoY, data from the Korea Customs Service showed. This was the largest decline since February 2024.

ASIA 

• Bank Indonesia left rates unchanged at 5.75% as was widely expected as IDR stability remains its focus but it did retain its easing bias.

• Indonesia’s March trade surplus widened to $4.33bn, highest since November, from $3.117bn. Q1 export growth outpaced imports. The data are too early to show any impact from the US’ tariffs.