MNI ASIA PAC Weekly Macro Wrap:

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Executive Summary:

JAPAN 

• Japan data this week has been second tier. The PPI print is consistent with the CPI holding close to 3%y/y, which prints next week (Q3 GDP is also out). Jawboning on yen weakness continued, but FX intervention didn’t appear an imminent risk. The government is starting to talk more about the negative implications of a weaker yen though. 

AUSTRALIA 

• In her November press conference, RBA Governor Bullock reiterated that the central bank looks at a range of labour market indicators and that overall they were stable and suggested a steady unemployment rate. The October jobs data were in line with this view with unemployment returning to 4.3%, the Q3 average..
• RBA Deputy Governor Hauser said that the economy may be hitting capacity constraints and if this is the case, could then add to price pressures.
• Consumer/business surveys released this week were consistent with an ongoing recovery while business prices/costs moderated.

NEW ZEALAND

• Q4 inflation expectations were steady implying that the Q3 increase in prices didn’t unanchor them, allowing the RBNZ to ease again on 26 November.
• Spending on cards continues to have positive momentum but remains soft with annual growth rates turning down.

SHORT TERM RATES 

• Interest rate expectations across the $-bloc out to mid-2026 have firmed over the past week, with Australia (+9bps), Canada (+9bps), the US (+5bps) and New Zealand (+2bps).

CHINA 

• China’s October CPI inched up to +0.2% y/y thanks to higher core, which was up to +1.2% for its highest print since February 2024. October activity data was mostly below forecast, particularly from the standpoint of investment and property related indicators. Still, given the earlier inflation beats, expectations for fresh policy easing have been pushed out a little.  

SOUTH KOREA 

• With October unemployment contained at 2.6%, the BOK could be on hold for some time. Comments from Bok Governor Rhee this week also helped push local rates higher, with the market moving to price out rate cut chances.

ASIA 

• Focus elsewhere has also been on the monetary policy outlook, with sharp moves higher in some Taiwan interest rates as well.