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Asian equity markets are mixed today amid a complex backdrop of global trade tensions, US economic data, and regional policy expectations.

• Japanese shares rebounded, with the Topix Index rising 1.30%  and the Nikkei advancing 1%, driven by gains in automakers like Toyota (+2.5%) and financial stocks, as softer US inflation data (core PCE up 0.3% month-on-month and 2.6% year-on-year) fueled expectations of potential Federal Reserve rate cuts, while a pause in yen appreciation encouraged buying.
• South Korea is out for Independence day, while Taiwan's TAIEX is trading 1.60% lower.
• Chinese stocks face uncertainty as investors await the NPC outcome on March 5, with hopes pinned on a robust fiscal stimulus to counter weak domestic demand and US tariff threats, though Hong Kong stocks are supported by growing mainland Chinese investment, which hit HK$153b net in February.
• Australia's ASX 200 edging up 0.3%led by banks and property stocks. New Zealand’s S&P/NZX 50 dipped 0.6%
• Elsewhere, the yen is poised for further gains as a safe-haven asset amid falling US Treasury yields and rising volatility, while the Australian dollar appears vulnerable due to trade concerns and reliance on Chinese policy clarity. Trump’s tariff plans, set to escalate on March 4, continue to weigh on sentiment, particularly for China-linked markets, though southbound flows into Hong Kong may mitigate some pressure. 

ACGBs (YM -3.0 & XM -4.0) are weaker after today’s domestic data drop.

• Inventories rose 0.1% q/q (estimate 0%) in Q4 versus a revised -0.7% in Q3.
• Company profits rose 5.9% q/q in Q4.
• ANZ-Indeed job advertisements dropped 1.4% m/m in February.
• Cash US tsys are 3-4bps cheaper in today’s Asia-Pac session after an emergency security summit in London on Sunday raised bets of increased European debt supply for defence spending. UK Prime Minister Keir Starmer convened the summit, including France’s Emmanuel Macron, as well as delegations from Canada, Germany, Norway and Turkey, in a bid to strengthen Ukraine’s position, secure a “lasting peace” and plan for security guarantees. (per BBG)
• Cash ACGBs are 3-4bps cheaper with the AU-US 10-year yield differential at +9bps.
• Swap rates are 3-4bps higher.
• The bills strip has bear-steepened, with pricing flat to -4.