MNI Asia Pac Weekly Macro Wrap:

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Executive Summary:

JAPAN 

• A quiet week data wise, with Japan out for the first 3 days of this week. We did get March labor earnings today, which were below expectations, but still showed real earnings in positive territory for the 3rd straight month. The authorities appeared to intervene during the holiday period to curb yen weakness. 

AUSTRALIA 

• In an 8-1 vote the RBA hiked rates 25bp to 4.35% as was widely expected. This was the third consecutive increase and brought rates back to where they were before 2025’s easing. The RBA believes that policy is now a “bit restrictive” but that tightening has given it “space” to monitor risks.
• Q1 household consumption volumes rose 0.7% q/q to be up 2.8% y/y, highest since Q2 2023, after 1.0% & 2.5% in Q4. There is a high correlation between this series and national accounts private expenditure but there can be discrepancies.

NEW ZEALAND

• The labour market continued its modest recovery in Q1. The unemployment rate was lower, there was job growth in both full-time (FT) and part-time (PT) sectors and hours worked were higher. While the unemployment rate dip to 5.3% was in line with the RBNZ’s February forecast, employment growth was softer. Wage growth also remained contained.

SHORT TERM RATES 

• Amidst ongoing uncertainty around the Middle East conflict and its implications for oil prices, interest-rate expectations across the $-bloc through December 2026 were modestly mixed over the past week, with Canada (-7bps) and New Zealand (-5bps) softer and the US (+4bps) and Australia (+1bp) slightly firmer.

SOUTH KOREA 

•  Local data outcomes continue to point to tightening risks from the BoK.  

ASIA 

• In April, ASEAN saw the S&P Global manufacturing PMI decline to 50.7 from 51.8, signalling that the sector continues to grow but at its slowest pace since July 2025 which drove a slight fall in staff levels. It was hampered by lower demand and input bottlenecks limiting capacity. There were increases in both input and selling price inflation.
• The Bank Negara Malaysia (BNM) statement from yesterday seemed to largely reflect a "strong hold." Further analysis suggests that there are hints of hawkishness in the change in the description of the current interest rate level.

ASIA EQUITY FLOWS 

• South Korean equity flows have been quite volatile, with recent sessions more than reversing earlier positive momentum for May. Positive inflow momentum for Taiwan is proving to be much stickier.