MNI ASIA PAC Weekly Macro Wrap:

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Executive Summary:

JAPAN 

• Japan nation wide CPI was close to expectations, but services inflation firmed. Export growth fell in y/y terms for the second straight month. FX verbal jawboning returned for the first time in a while. This weekend the focus is on upper house elections, where the LDP coalition may lose its majority. 

AUSTRALIA 

• Jobs data was the main focus this week, with some signs of softer conditions. Notably the unemployment rate edged up 0.2ppt to 4.3%, highs back to late 2021. This data saw RBA easing odds for August firm. 

NEW ZEALAND

• Partial NZ price data on food and energy prices points to firmer upside Q2 CPI pressures. This data prints next Monday. The figures may be above the RBNZ forecast made back In May, but the recent central bank statement highlighted firmer headline price risks in the near term. 

SHORT TERM RATES 

• Interest rate expectations across dollar-bloc economies firmed over the past week-except in Australia, where rates softened by 4bps.

CHINA 

• China Q2 GDP growth was slightly above market expectations, suggesting the 5% growth should be achieved this year. Still, softer retail sales, along with continued weakness in property activity and price indicators, points to on-going headwinds in parts of China’s economy. 

ASIA 

• The BI cut rates this week and left the door ajar for further cuts, as focus turns to boosting growth. Singapore data was better than expected in terms of Q2 growth and exports. Malaysian Q2 GDP was close to expectations, but June export growth slowed notably. 

ASIA EQUITY FLOWS 

• Taiwan remains the standout from an equity flow standpoint, amid AI/chip optimism. South Korea inflow momentum has slowed, while Thailand has recovered some ground, amid hopes of a more dovish BoT outlook.