AUSTRALIA DATA: Jan Inflation Sees Y/Y Momentum Edge Up, Few Signs Of Cooling

The Jan inflation report was slightly above market expectations in y/y terms and its difficult to find signs of softening underlying inflation pressures. The headline printed at 3.8%y/y, unchanged from Dec (3.7% was the forecast), while the trimmed mean, the RBA's preferred measure of underlying inflation rose 3.4%y/y (against a 3.3% forecast, which was also the Dec outcome). The trimmed mean rounded to two decimal places was 3.36% in Jan, from 3.34% in Jan, so only a marginal increase. In m/m terms headline inflation was 0.4% firmer, after a 1.0% rise in Dec, while the trimmed mean rose 0.3% (after a 0.2% rise in Dec). * The table below is from the ABS and highlights the m/m and y/y changes for Jan. The second column is y/y changes and shows outside of tradables inflation (1.9%y/y), other measures of inflation are comfortably above the top end of the RBA's 2-3% target band (even if they saw m/m falls in Jan). * By sub-sector we had falls in household furnishings, transport and recreation (the largest fall at -3.4%). In y/y terms, household furnishings, transport and communication are 1.1-1.4% but all other segments are higher than 2.0%, with housing the strongest at +6.8%y/y. * The ABS noted: "Annual Housing inflation was 6.8 per cent to January, up from 5.5 per cent to December. This reflects cost rises in Electricity, New dwellings and Rents. Electricity costs rose 32.2 per cent in the 12 months to January, up from 21.5 per cent to December. The increase in electricity costs over the year is mostly related to households using up both the extended Commonwealth Energy Bill Relief Fund (EBRF) and various State Government rebates. The higher increase in the year to January compared to December reflects the cessation of the EBRF rebates." Table 1: Australian Bureau of Statistics Inflation Series , M/M & Y/Y ----------------------------------------------------------------------------- Analytical series Dec 25 to Jan 26(% Jan 25 to Jan 26(% change) change) Trimmed mean 0.3 3.4 Weighted median 0.3 3.6 CPI excluding volatile 0.5 4.1 items* CPI excluding volatile 1.1 4.1 items* and holiday travel Tradables -1.2 1.9 Non-tradables 1.2 4.9 Goods 1.3 3.8 Services -0.7 3.9 Discretionary -0.5 3.5 Non-discretionary 1.0 4.1 All groups CPI, 0.5 3.8 seasonally adjusted *Volatile items are Fruit and vegetables and Automotive fuel Source: Australian Bureau of Statistics, Consumer Price Index, Australia January 2026

AUSTRALIA DATA: Jan CPI Slightly Stronger Than Forecast

Slightly stronger than forecast y/y momentum for headline and trimmed mean CPI. Headline was 3.8%y/y (3.7% was forecast, and prior 3.8%). Trimmed mean was 3.4% (forecast 3.3% and prior 3.3%). In m/m terms headline CPI rose 0.4% (1.0% gain in Dec) and trimmed mean rose 0.3% (after 0.2% gain in Dec). More details to follow.

JAPAN DATA: Jan Services PPI As Expected, Sitting Higher Than Headline CPI

The Japan Jan services PPI print came in as expected, 2.6%y/y, which was also the Dec outcome. We fell -0.5% in m/m terms, after a flat outcome in Dec. Jan tends to be a weak seasonal month for the services PPI, where it tends to fall. The rolling 12 month average for the services PPI in m/m terms still sits above +0.20%, down only slightly from earlier 2025 highs. The chart below plots the services PPI (the white line) versus headline CPI (orange line), which has fallen sharply in recent months. The services PPI is suggesting that the extent of the recent softening in headline CPI is probably overstating the weakening in underlying trends. * Note on Friday we get the Feb Tokyo CPI print. The market expects further headline softening to 1.4%y/y (from 1.5%), but core-core, ex fresh food and energy, is forecast at 2.3%y/y (2.4% was the Jan outcome). Fig 1: Japan Services PPI Y/Y & Headline CPI Y/Y Source: Bloomberg Finance L.P./MNI

MNI: JAPAN JAN SERVICES PPI +2.6% Y/Y; DEC UNREV +2.6%

* MNI: JAPAN JAN SERVICES PPI +2.6% Y/Y; DEC UNREV +2.6% * JAPAN JAN SERVICES PPI -0.5% M/M: DEC UNREV +0.0%