ASIA STOCKS: Taiwan Sees Huge Inflow on Back of TSMC News. 

Other Japan data released showed core machine orders for Dec weaker than forecast. We fell 1.2% m/m, against a 0.5% forecast and 3.4% prior. In y/y terms we printed 4.3% (against a 7.5% forecast and 10.3% prior). 

• We saw weakness for both manufacturing and non-manufacturing orders. Manufacturing was still positive y/y, albeit just.
• The chart below overlays core machine orders against Japan Capex (ex software spend). The softer machine order read is hinting at a slightly weaker capex backdrop, but arguably we need to see a firmer downtrend in machine orders to be more confident in such a call.
• Note we get Q4 capex data on March 4.  

Fig 1: Japan Core Machine Order & Capex (Ex Software) Y/Y

Source: MNI - Market News/Bloomberg 

RBNZ dated OIS pricing is slightly softer across meetings today, ahead of the RBNZ Policy Decision.

• The RBNZ decision is widely expected to cut rates 50bp again to 3.75%. Revised staff forecasts will also be published with the decision at 1200 AEDT/1400 NZDT and Governor Orr’s press conference taking place at 1300 AEDT/1500 NZDT.
• All 22 analysts surveyed by Bloomberg forecast a 50bp rate cut, and the RBNZ shadow board recommends 50bp of easing.
• Notably, OIS pricing is 2–15bps firmer than pre-Q4 Labour Market data levels from February 4.
• Nevertheless, 49bps of easing is priced for today, with a cumulative 115bps by November 2025.

Figure 1: RBNZ Dated OIS Today vs. Yesterday (%)

Source: MNI – Market News / Bloomberg

Today’s auction showed strong pricing for ACGBs, with the weighted average yield coming in 0.63bps below prevailing mid-yields, according to Yieldbroker. Additionally, the cover ratio rose to 4.1437x from an already robust 4.000x at the previous auction. 

• As noted in our preview, the current yield was approximately 10bps higher than at the prior auction, likely contributing to the robust demand. Improved sentiment toward longer-dated global bonds over recent weeks, along with a steeper 3s/10s yield curve, also likely supported the auction’s success.
• Post-auction, both the cash line and XM are slightly cheaper.