JAPAN DATA: Imports Surge, Weighing On Trade Position, Surplus With US Falls

Japan Nov core machine orders data comfortably beat expectations. We were up 3.4%m/m, versus -0.8% forecast (prior was +2.1%). In y/y terms we rose 10.3%, against a 4.2% forecast (prior as 5.6%). 

•  The +10%y/y print for core machine orders was back close to 2024 highs. Momentum recovered strongly through Q4 and was mostly ahead of market expectations. In terms of the detail, the non-core items were quite volatile (which is typically the case). In y/y terms, manufacturing orders were 15.3% y/y, versus 7.6% prior. Non-manufacturing was 6.8% from 27.7% in Oct.
• The chart below overlays this print against Japan capex spending (ex Software) in y/y terms. It suggests a firm capex backdrop prevailed into year end for Japan.
• This isn't a key watch point for the BoJ, with wages and inflation more in focus, but still will be welcomed ahead of Friday's policy outcome. It is a sign of a resilient economic backdrop. 

Fig 1: Japan Core Machine Orders (White Line) versus Japan Capex, Ex Software (Y/Y)

India continues to see heavy outflows with $4.5b in outflows to kick the year off. South Korea saw net outflows last week, however is the only region with a net inflow for the year.

• South Korea: Recorded outflows of -$213m Friday, contributing to a 5-day total of -$479m. YTD flows remain positive at +$288m. The 5-day average is -$96m, worse than the 20-day average of -$22m but better than the 100-day average of -$154m.
• Taiwan: Posted inflows of +$376m Friday, leading to a 5-day total of -$1.56b. YTD flows are negative at -$2.16b. The 5-day average is -$312m, worse than the 20-day average of -$129m and the 100-day average of -$125m.
• India: Registered outflows of -$502m Thursday, resulting in a 5-day total of -$2.57b. YTD flows are deeply negative at -$4.53b. The 5-day average is -$514m, worse than the 20-day average of -$300m and the 100-day average of -$72m.
• Indonesia: Recorded inflows of +$15m Friday, with a 5-day total of +$15m. YTD flows remain negative at -$166m. The 5-day average is +$3m, better than the 20-day average of -$17m and matching the 100-day average of +$3m.
• Thailand: Posted outflows of -$37m Friday, contributing to a 5-day total of -$160m. YTD flows are negative at -$222m. The 5-day average is -$32m, worse than the 20-day average of -$13m but slightly worse than the 100-day average of -$8m.
• Malaysia: Saw outflows of -$48m Friday, leading to a 5-day total of -$295m. YTD flows are negative at -$429m. The 5-day average is -$59m, worse than the 20-day average of -$27m and the 100-day average of -$17m.
• Philippines: Registered outflows of -$2m Friday, bringing the 5-day total to -$57m. YTD flows are negative at -$81m. The 5-day average is -$11m, worse than the 20-day average of -$7m and the 100-day average of -$1m.

Table 1: EM Asia Equity Flows

• MNI JAPAN NOV CORE MACHINE ORDERS +3.4% M/M; OCT +2.1%