FXTRADING Economic Data Summary (Asia-Pacific | 04/07)

US retail data signals steady momentum

US retail sales rose by 0.6% month-on-month in February, reaching a total of $738.4 billion, clearly outperforming the market expectation of 0.4%. Excluding auto sales, retail sales still increased by 0.5% on a monthly basis, and even when gasoline sales are further removed, the overall gain remained at 0.6%. This indicates that consumption growth is not driven by a few volatile categories, but rather supported by broad-based expansion across multiple sectors.

Looking at a slightly longer time frame, headline retail sales grew by 3.7% year-on-year, while total sales from December 2025 to February 2026 maintained a 3.1% annual increase. Retail trade sales also climbed, rising 0.6% month-on-month and 3.5% year-on-year. These figures suggest that US household consumption continues to underpin economic activity, with no clear signs of cooling demand. FXTRADING analysis believes that the broad-based strength in retail data reflects a solid consumption foundation, and as long as the labor market does not weaken significantly, consumption momentum is likely to persist in the near term.

Japans economy supports policy normalization

Japan‘s Tankan survey for the first quarter showed that the large manufacturers’ sentiment index edged up from 16 to 17, exceeding market expectations. At the same time, the non-manufacturing index held at 36, also coming in above forecasts. Overall, Japanese corporations continue to hold a relatively positive view of the current economic environment.

Large enterprises expect capital investment to grow by 3.3% in fiscal year 2026, slightly above the market estimate of 3.0%. Demand related to artificial intelligence and semiconductors remains strong, with these structural investment drivers playing a key role in sustaining corporate confidence. However, rising energy costs driven by Middle East tensions are placing pressure on petrochemical and resource-related industries. FXTRADING analysis suggests that Japans corporate sector remains broadly healthy, with stable investment and confidence providing a realistic foundation for the Bank of Japan to gradually proceed with policy normalization, although rising energy costs remain a key risk to watch.

Oil shock reinforces tightening expectations in Australia

The Reserve Bank of Australia signaled a relatively clear policy stance in its latest meeting minutes, with policymakers noting that inflation remains elevated, while demand conditions are still relatively strong and the labor market remains tighter than full employment levels. In this context, policymakers generally see the possibility of further monetary tightening in the near term.

RBA members believe that rising oil prices will push up inflation in the short term and may also exert some drag on economic activity. However, they emphasized that monetary policy cannot eliminate the initial energy price shock, but it can prevent cost pressures from passing through to end prices by tightening financial conditions. FXTRADING analysis indicates that with strong demand and the added impact of oil price shocks, Australias disinflation path may become more complicated, requiring the central bank to maintain a relatively hawkish stance in the short term.

Rising uncertainty in New Zealands economy

ANZs March business confidence index dropped sharply from 59.2 to 32.5, marking a significant decline. Geopolitical tensions are increasingly weighing on business expectations, with even more pronounced deterioration observed in late-month survey responses.

At the same time, firms‘ own activity outlook index fell from 52.6 to 39.3, indicating that businesses are becoming more cautious in investment and expansion decisions. However, in contrast to weakening demand expectations, price pressures are rising. Firms’ expectations for future price increases have strengthened noticeably, with a growing share of businesses planning to raise prices and higher average pricing expectations. FXTRADING analysis suggests that New Zealands economy is currently facing a combination of weakening demand and rising costs, a structural imbalance that is likely to complicate policy management in the period ahead.

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