JAPAN DATA: Bond Purchase Outflows Lagging Better Global Bond Returns

Earlier data on weekly investment flows (for the week ending Feb 13), showed that Japan investors sold offshore bonds for the second consecutive week. Going back over recent months, there has been modest net selling pressure in this space, highlighted by sharp net selling at the end of 2025. This net selling momentum is a little at odds with more positive global bond returns in recent months, see the chart below. To be sure, the divergence between the two series is not large and better global bond returns (proxied here using the LEGATRUU Index via BBG) have led some upswings in outbound flow to overseas bonds in the past. * Still, it is likely to be watch point for the market in the sense that it may raise a question around whether we are seeing a stronger home bias from local Japan investors. If this were to materialize it would have implications in terms of global bond markets given the traditional importance of Japan investment into these markets. Fig 1: Japan Weekly Net Bond Purchases (BN Yen) - 12 Wk Sum & Global Bond Returns -12 wk Change Source: Bloomberg Finance L.P./MNI

AUSTRALIA DATA: Better Jobs Data, Amid Full Time Rise & Steady U/E Rate

On balance the Jan jobs report was better relative to market expectations. Jobs growth rose +17.8k, versus 20.0k forecast. The Dec gain was revised up a touch to 68.5k (65.2k was the original estimate), which means net of revisions the Jan outcome was close to market forecasts. Full time jobs growth continued to outpace part time, up 50.5k, after a revised 56.8k rise in Dec. Part time jobs fell -32.7k, after a revised 11.7k gain in Dec. The unemployment rate held steady at 4.1%, unchanged from Dec, and versus a forecast rise to 4.2%. The participation rate was as expected at 66.7%. * The chart below plots the y/y outcomes for total, full time and part time jobs growth. Total employment growth is around 1%, well off early 2025 highs of around 3%, but since end Q3 last year jobs growth has stabilized above this 1% level. Full time jobs growth is also off earlier 2025 highs, but is showing signs of better momentum after getting close to flat in y/y terms. * Given the volatile nature of the jobs data, these are more likely to be watch points for the RBA at this stage rather than thinking about changing its medium term outlook. * The unemployment rate held at Dec levels of 4.1%. The RBA forecast profile has the unemployment rate steadily edging up (4.3% by mid this year). A more resilient jobs market backdrop, which keeps the unemployment sub these levels may prompt further RBA action, as it could see risks this drives stronger underlying inflation pressures. Again though the RBA will likely wait to see how Feb and Mar prints evolve. * The ABS also noted though: "The underemployment rate rose 0.2 percentage points to 5.9 per cent in January. The underutilisation rate also grew by 0.2 percentage points to 10.0 per cent." * While adding on hours worked: "'This month fewer people reported working less hours than typical Januarys due to being on leave. This contributed to hours worked growing more strongly than employment,' Mr Crick said. Fig 1: Australian Jobs Growth - Y/Y Source: ABS/MNI Fig 2: Australian Unemployment Rate Source: ABS/MNI

MNI:AUSTRALIA JAN UNEMPLOYMENT RATE +4.1%

* MNI:AUSTRALIA JAN UNEMPLOYMENT RATE +4.1% * MNI:AUSTRALIA JAN LABOR PARTICIPATION RATE +66.7% * MNI: AUSTRALIA JAN EMPLOYED PERSONS CHANGE 17.8K * MNI: AUSTRALIA JAN F-T EMPLOYED PERSONS CHANGE 50.5K

JAPAN DATA: Dec Core Machine Orders Surged, Aiding Capex Outlook

Japan's Dec core machine orders surged by 19.1%/m/m, more than unwinding the -11% drop from Nov and well above the market consensus of 5.0%. In y/y terms we rose 16.8%, also well above consensus expectations (3.9%) and the prior -6.4% outcome. The chart below plots y/y core machine orders (the white line) against Japan Capex. Today's core machine order rebound will be welcomed (it is back close to highs from mid 2022), ending a volatile quarter on a firmly positive note (up 7.0% in Oct, down 11% in Nov, before rebounding strongly in Dec). We get the Q4 capex print on March 3. The initial Q4 GDP estimate showed business spending was up a modest 0.2%q/q (after falling -0.3% in Q3). * A better capex tone would fit with an improved external demand backdrop, with earlier data this week showing Jan exports posting a solid 16.8% y/y rise. * The detail for today's core machine orders print showed strength across most sub-categories, with manufacturing and non-manufacturing both up over 25% in the month. Fig 1: Core Machine Orders & Capex (Ex Software) Y/Y Source: Bloomberg Finance L.P./MNI