MNI ASIA PAC Weekly Macro Wrap:

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Executive Summary:

JAPAN 

• Japan Nov Labour earnings data was comfortably below market forecasts due to a slump in bonuses. Household spending was better than forecast for the same month though. The BoJ regional economic report also highlighted firm 2026 wage plans as well. 

AUSTRALIA 

• November CPI inflation data moved in the right direction for the RBA to prolong its pause but remain cautious as underlying 3-month momentum remains elevated. As this data is only new with little track record, the RBA will be looking to the Q4 data due on 28 January. November trimmed mean moderated 0.1pp to 3.2% y/y.
• RBA Deputy Governor Hauser spoke to the ABC and noted that while the November CPI data was “helpful”, it was largely within expectations. Hauser said that the probability of near-term monetary easing is “very low” as the last rate cut this cycle has likely taken place.

SHORT TERM RATES 

• Interest-rate expectations across the $-bloc over the past month, looking out to June 2026, have been little changed overall, with the notable exception of New Zealand, where expectations softened by 16bps. Elsewhere, US pricing edged 3bps higher, while Australia and Canada eased by 5bps and 1bp, respectively.

CHINA 

• December CPI in China rose 0.8% in line with estimates. China has not released the 2026 CPI forecasts yet but based on the 2025 forecast of 2.0%, CPI remains below target. The rise to 0.8% represents the highest CPI print since February 2023.
• The official China PMIs for December showed an improvement in activity with both manufacturing and non-manufacturing returning to growth. The composite PMI rose to 50.7 from 49.7, which had been the first move below the breakeven 50-level since December 2022.

ASIA 

• The December ASEAN aggregate manufacturing PMI moderated to 52.7 from 53.0 but continued to show growth in the sector driven by output and domestic orders but export orders remained weak. Thailand outperformed. Confidence in the outlook rose to a 10-month high.
• Headline inflation rose more than expected in December printing at 2.9% y/y up from 2.7% but in line with the October outcome. There was a pickup in both fresh food and administered price inflation. Core was stable at 2.4% y/y for the third straight month and below 2025’s high of 2.5%.