JAPAN DATA: Export Growth Improves Ahead Of Tariffs, Trade Position In Surplus

RBA-dated OIS pricing is flat to 2bps firmer across 2025 meetings today, led by late-2025 contracts, ahead of tomorrow’s RBA Policy Decision.

• A 25bp rate cut in April remains more than fully priced (118%), while the probability of a cut tomorrow stands at 83%, based on an effective cash rate of 4.34%.
• OIS pricing is mixed compared to pre-Q4 CPI levels on 24 January, with the Aug-25 meeting up 15bps since early February.
• Historically, it would be highly unusual for the RBA to diverge from market expectations, particularly given its lack of any official or unofficial pushback—a stance it has actively taken in the past.
• The last time the RBA defied market expectations by holding rates despite a 75%+ probability of a cut was April 2015, and before that, November 2012. In both instances, the RBA delivered a 25bp cut at the following meeting.

Figure 1: RBA-Dated OIS – Today Vs. Pre-Q4 CPI

Source: MNI – Market News / Bloomberg

• MNI JAPAN Q4 REAL GDP +0.7% Q/Q; MNI MEDIAN +0.3%
• JAPAN Q4 REAL GDP 2.8% ANNUALIZED; MNI MEDIAN +0.9%
• JAPAN Q4 CONSUMPTION +0.1% Q/Q; +0.1 PP CONTRIBUTION
• JAPAN Q4 CAPEX +0.5% Q/Q; +0.1 PP CONTRIBUTION

• RES 3: 147.74 - High Jan 15 and bull trigger (cont)
• RES 2: 146.53 - High Aug 6 
• RES 1: 142.73/144.48 - High Dec 9 / High Nov 11  
• PRICE: 139.69 @ 16:21 GMT Feb 14
• SUP 1: 139.46 - Low Feb 13
• SUP 2: 139.38 - 2.764 proj of the Aug 6 - Sep 3 - 9 price swing
• SUP 3: 138.87- 3.000 proj of the Aug 6 - Sep 3 - 9 price swing    

A clear downtrend in JGB futures firmed further, with the latest fresh cycle lows reinforcing the condition. Note too that MA studies on the continuation chart are in a bear-mode setup, highlighting a clear downtrend. The 140.00 psychological handle has been pierced. Markets have shown through 139.38, a Fibonacci projection. For bulls, a reversal would open 142.73 and 144.48, the Dec 9 and Nov 11 high respectively. Gains would be considered corrective.