MNI Asia Pac Weekly Macro Wrap:

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Executive Summary:

JAPAN 

• Japan wages data was better than expected in July, aided by bonus payments. Underlying pay trends didn’t appear to shift much though. Q2 CAPEX was firm in Y/Y terms, but slowed versus Q1. BoJ rhetoric remains skewed towards further tightening, but the central bank is watching tariff fallout closely. 

AUSTRALIA 

• Q2 GDP was stronger than both the RBA and consensus expected as it rebounded from Q1’s weather-impacted soft result and benefited from holidays. Given the RBA’S cautious stance towards easing and recent stronger data, a September rate cut looks unlikely and November will depend on new information and the outlook. RBA dated OIS contracts have firmed this week. 

NEW ZEALAND

• News flow and data outcomes for NZ have been light this past week. NZ saw the largest improvement in the merchandise terms of trade in Q2 since Q1 2024.

CHINA 

• China PMI measures improved for August for both manufacturing and services, suggesting better economic momentum as we progress through Q3. Focus also remains on clearing the housing backlog. Equity market dips have been supported. 

SOUTH KOREA 

• South Korean exports painted a resilient picture for August, but are unlikely to shift the aggregate growth needle. The PMI remained in contraction. The CPI was below expectations, but the BoK expects it to bounce back in Sep. 

ASIA

• Indonesian markets saw volatility amid onshore protests. As expected BNM held rates steady. August S&P Global manufacturing PMIs for ASEAN released were all in growth territory signalling stronger growth in activity in the month. 

ASIA EQUITY FLOWS 

• South Korea and Taiwan equity flows recovered some ground this past week, as tech equity sentiment improved. Outflows were mostly evident elsewhere in the region.