MNI ASIA PAC Weekly Macro Wrap:

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Executive Summary:

JAPAN 

• The Q3 Tankan survey printed in line with expectations and Q2 but FY25 capex intentions increased 1pp to 12.5%. Large company business conditions have been moving sideways at a solid level since the start of last year, especially for the non-manufacturing sector. August jobless data was weaker than forecast, while tomorrow delivers the LDP leadership election. Koizumi is seen as the firm favourite to be the next PM. 

AUSTRALIA 

• The RBA decided to leave rates at 3.6% in a unanimous vote, which was widely expected. Its tone was generally more cautious than in August and it is definitely keeping its options open regarding future decisions with Governor Bullock not committing to an easing or neutral bias.
• August household consumption was weaker than expected rising 0.1% m/m with the annual rate slowing to 5.0% from 5.3%. The RBA noted in September that private consumption was stronger than it expected as financial conditions have eased and real incomes are higher. It will be monitoring the quarterly volumes included in the September release on 3 November. 

NEW ZEALAND

• August filled jobs rose 0.2% m/m after a downwardly revised flat July. This is the first increase in hiring since January and while the labour market appears to have stabilised conditions remain weak with filled jobs down 0.7% y/y.
• Business activity remained subdued but price/cost components were higher including inflation expectations.

SHORT TERM RATES 

• Interest rate expectations across the $-bloc have shown little net change over the past two weeks, except in Australia, which firmed sharply (+15bps).

CHINA

• China's official PMIs for September continued with the theme from the last few months. PMI Manufacturing continues to inch up whilst PMI Services inches down. China's RatingDog China PMI Mfg for September was +51.2, up from +50.5 in August and the highest since March.

SOUTH KOREA 

• After briefly dipping in August in what was primarily technically driven, CPI YoY moved back above the BOK 2% target in the September release.
• In what could be a key input into the monetary policy committee decision later this week, Korea's September PMI Manufacturing moved back above 50 into expansion for the first time since January.

ASIA

• The Central Bank in India, the RBI, kept its key rate unchanged at 5.5% today. The unanimous vote, consistent with the last meeting, sees the central bank retaining its neutral stance.
• The September S&P Global manufacturing PMI for the ASEAN region rose 0.6 points to 51.6 signalling growth in the sector at its fastest pace in 14 months. However, the improvement was not broad based as it was driven just by Thailand and Myanmar. Indonesia and the Philippines saw declines.

ASIA EQUITY FLOWS 

• Inflows continue to be dominated by tech sensitive markets. The past week has seen South Korean inflows surge.