MNI ASIA PAC Weekly Macro Wrap:

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Executive Summary:

JAPAN 

• The BoJ held rates steady at 0.50%, as widely expected. The decision by the board was also unanimous. The central bank nudged down the degree of uncertainty surrounding the outlook. It doesn’t appear in a rush for the next rate hike. 

AUSTRALIA 

• Australia’s Q2 trimmed mean CPI printed only 0.1pp above the RBA’s May Q2 forecast, which with the economy developing broadly in line with expectations since the July meeting should allow it to ease 25bp on August 12. Trimmed mean rose 0.6% q/q to be up 2.7% y/y, a moderation from Q1’s 0.7% & 2.9%.
• RBA Deputy Governor Hauser noted that Q2 trimmed mean inflation and unemployment prints were in line with projections. The Q2 CPI data was “very welcome”.

NEW ZEALAND

• June filled jobs rose a lacklustre 0.1% m/m but down 1.1% y/y following a downwardly-revised -0.1% m/m & -1.7% y/y. This left Q2 down 0.3% q/q and -1.6% y/y after -0.1% & -1.7% in Q1, suggesting that while the pace of deterioration has slowed, the labour market continues to struggle. Q2 labour data is on August 6.
• There was little change in ANZ business confidence and the outlook in July with the former rising 1.5 points to 47.8 but the latter falling 0.3 to 40.6. It signals that the recovery continues but at a gradual pace.

SHORT TERM RATES 

• Interest rate expectations across the$-bloc economies were broadly stable over the past week, except for the U.S., where rates firmed by 11bps. 

CHINA

• In Q2 of 2025, the PBOC undertook a survey of households with 20,000 responders across 50 cities. The Income Perception Index fell 1.2% to 45.0% from the previous quarter with 20% of respondents believing their income had decreased, dragging the Income Confidence Index Lower.

 SOUTH KOREA 

• South Korea obtained a 15% reciprocal tariff rate from the US, although will make meaningful investments into the US (awaiting more details on this). July trade figures held up well. 

ASIA 

• US President Trump has announced a trade deal has been reached with South Korea. A 15% tariff rate will apply to exports to the US. Trump states that South Korea has also agreed to $350bn in investments into the US, along with $100bn worth of LNG or other energy purchases from the US.
• The MAS left policy settings unchanged at the July meeting, which was in line with the sell-side consensus, along with more elevated NEER. The tone of the MAS statement suggests it is in wait and see mode, particularly around trade/external risks.

ASIA EQUITY FLOWS 

• South Korea and Taiwan equity flows were strong in July, can the momentum be maintained? 

GLOBAL 

• CPB global trade volumes fell for the second straight month in May, the month after the US announced significant reciprocal tariffs. There had been frontloading ahead of the announcement with global export volume growth peaking in March at 6.5% y/y.