MNI Asia Pac Weekly Macro Wrap:

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Executive Summary:

JAPAN 

• Japan revealed a large +¥21trln fiscal stimulus, amid rising bond yields. FX rhetoric also picked up, with intervention an option. Oct CPI was close to expectations and rose to back around 3%. Q3 GDP (preliminary) in Japan was negative q/q, but not as much as the market forecast, thanks to upbeat business spending (+1.0%q/q versus -0.1% forecast). This was the first GDP decline since Q1 2024, but the detail paints a resilient underlying economic backdrop and comes ahead of fresh fiscal stimulus.

AUSTRALIA 

• The November meeting minutes reiterated that the RBA’s central scenario is “in balance” with risks to both the downside and upside. How these risks will develop is likely to determine whether monetary policy stays on hold or rates are cut further.
• Q3 wages rose 0.8% q/q to remain at 3.4% higher on a year ago, signalling a stabilisation. In November, the RBA forecast 3.4% y/y for Q4 2025 before moderating to 3% by end 2026. Thus, the Q3 WPI data don’t change the outlook for monetary policy with rates likely on hold towards at least mid-2026.

NEW ZEALAND

• The Oct services PMI (via BNZ and Business NZ) edged up to 48.7 from 48.3 in Sep. We look to be on a steady improvement trend, but from depressed levels and the index hasn't been above the 50.0 expansion/contraction point since early 2024.

SHORT TERM RATES 

• Interest rate expectations across the $-bloc out to mid-2026 were broadly stable over the past week, with all net moves confined within a narrow ±2bp range.

SOUTH KOREA 

•  Firmer Q3 household credit data, along with upbeat first 20-days exports for Nov points to an on hold outcome form Bok net week. 

ASIA 

• Bank Indonesia (BI) held rates at 4.75% as was widely expected. Its near-term focus returned to “maintaining Rupiah exchange rate stability and attracting portfolio inflows” after focusing on growth through Q3.
• Thailand Q3 GDP was weaker than forecast, falling -0.6%q/q, versus the market consensus of a -0.3% drop. This was the first fall in quarterly GDP since the end of 2022.

GLOBAL 

• After frontloading of shipments to the US in H1 boosted prices, container rates fell from July but have risen sharply in November to date, possibly a sign of continued solid export volumes.