FXTRADING Economic Data Summary (Asia-Pacific | 06/01)

Swiss Economy Still Struggling to Escape Weakness

Switzerlands KOF Economic Barometer edged up from 97.8 to 98.0 in May, marking a second consecutive monthly increase. However, the index remains below its long-term average, suggesting that although the economy is showing signs of stabilization, the recovery remains limited. Weak European demand, an unstable external trade environment, and ongoing volatility in energy costs continue to weigh on corporate expansion and investment appetite.

From an industry perspective, the manufacturing sector remains weak, with industrial activity recovering only slowly and export-oriented businesses still under pressure. However, the financial and insurance sectors have remained relatively stable, providing some support to the broader economy. On the demand side, overseas demand has improved slightly, but domestic consumption remains soft, with private consumption indicators continuing to decline, reflecting cautious household spending behavior. FXTRADING believes the Swiss economy is currently moving sideways at low levels rather than entering a genuine recovery phase. Although the KOF index rose to 98.0, both manufacturing activity and consumer demand still lack clear momentum.

New Zealand Business Confidence Rebounds Sharply

New Zealand‘s ANZ Business Confidence Index surged from -10.6 to 10.0 in May, returning to positive territory, while firms’ own activity outlook climbed from 19.6 to 25.6, indicating that pessimism toward the economic outlook has eased significantly. As markets gradually adapt to higher energy prices and geopolitical risks, business sentiment has begun to stabilize.

However, inflation expectations for the next year eased from 3.81% to 3.63%, while wage expectations also slipped slightly from 2.53% to 2.48%, suggesting overall price pressures remain manageable for now. Hiring intentions improved noticeably, rising from -2.7 to 3.4. Nevertheless, the retail and construction sectors remain weak, while agriculture and manufacturing appear more resilient. FXTRADING believes the improvement in New Zealand business confidence suggests companies are gradually adapting to the current high-cost environment. However, consumer-related and property-linked sectors remain under pressure, and the sustainability of the recovery will still largely depend on employment conditions and household spending.

Tokyo Inflation Cooling Suggests Japans Economy Remains Resilient

Tokyo core CPI slowed from 1.5% yoy to 1.3% in May, while headline inflation eased from 1.5% to 1.4%. Core-core CPI also fell from 1.9% to 1.6%, marking several consecutive months of moderating inflation. Government subsidies for utility bills and education expenses were key drivers behind the recent decline in inflation.

Despite softer inflation, Japans industrial production rose 0.8% mom in April, and manufacturers expect output to increase another 5.1% in May. Retail sales grew 2.1% yoy, while the unemployment rate declined from 2.7% to 2.5%, indicating that consumption and the labor market remain stable. With international oil prices rising and the yen remaining weak, imported inflation pressures could still re-emerge in the coming months. FXTRADING believes Japan is currently experiencing a combination of easing inflation and stable economic activity. Although Tokyo CPI continues to slow, employment, consumption, and industrial activity remain resilient, meaning the conditions for the Bank of Japan to continue policy normalization have not materially changed.

US Durable Goods Orders Surge Strongly

US durable goods orders jumped 7.9% mom in April to USD 346.0 billion, far exceeding market expectations of a 3.3% increase. Transportation equipment orders surged 21.5% to USD 130.9 billion, serving as the primary driver behind the strong overall growth. Even under a high interest-rate environment, US business investment demand continues to show strong resilience.

Excluding the volatile transportation sector, core durable goods orders still increased 1.1%, above market expectations of 0.5%, reaching USD 215.1 billion. Excluding defense orders, total orders also rose 8.1% to USD 320.3 billion, indicating that private-sector demand remains stable. Although rising energy prices and Middle East tensions continue to increase uncertainty, corporate capital expenditure has not shown clear signs of slowing yet. FXTRADING believes the continued upside surprise in durable goods orders reflects that the US economy remains more resilient than markets previously expected. High interest rates have not yet significantly restrained business investment, although future changes in energy costs and financial conditions could still create pressure for the manufacturing sector.