Introduction to the Asia-Pacific Session
It’s a light data agenda for the session here in Asia-Pacific on Tuesday, January 20, 2026. The day will begin with the release of the services PMI from New Zealand, specifically the BusinessNZ Performance of Services Index for December 2025.
New Zealand’s Manufacturing PMI
Last week, we had the December manufacturing PMI (BusinessNZ Performance of Manufacturing Index), which showed promising results. Key points from the report include:
- New Zealand’s manufacturing PMI rose to 56.1 in December, the highest since December 2021.
- All five sub-indices expanded, led by a sharp rise in new orders and production.
- Employment returned to growth after earlier declines during 2025.
- Seasonal demand helped, but confidence, exports, and infrastructure work also supported activity.
- BNZ sees upside risk to near-term GDP growth from the stronger PMI print.
Given the leap higher for manufacturing, it seems safe to look for improvement back into expansion for the services PMI. If this happens, it should be another positive for the NZD.
China’s Loan Prime Rates (LPRs)
Around the same time as the release of the services PMI, the People’s Bank of China will set the USD/CNY reference rate for the session and announce its Loan Prime Rates (LPRs). Although this used to be a highly anticipated event, it has lost some of its significance since China’s main policy rate is now the reverse repo rate, currently at 1.4% for the 7-day. The 7-day rate serves as a key policy benchmark, influencing other lending rates like the Loan Prime Rates (LPRs).
In December, the LPR setting left the 5-year rate at 3.50% and the 1-year rate at 3.00%. There is no change expected for either rate today, marking the eighth consecutive month without a change.
Historical Changes in LPR
| A look back at the past changes in the LPR since early 2022 shows the following adjustments: | Date | One-year LPR | Five-year LPR | Change | Notes |
|---|---|---|---|---|---|
| May 2025 | 3.00% | 3.50% | -10bp | Latest cut; both 1Y and 5Y trimmed. | |
| Feb 2024 | 3.45% | 3.95% | -25bp (5Y only) | Big mortgage-linked cut aimed at property sector support. | |
| Aug 2023 | 3.45% | 4.20% | -10bp (1Y), -15bp (5Y) | Coordinated easing to counter weak growth. | |
| Jun 2023 | 3.55% | 4.20% | -10bp (1Y), -10bp (5Y) | First LPR cut since Aug 2022. | |
| Aug 2022 | 3.65% | 4.30% | -5bp (1Y), -15bp (5Y) | Targeted mortgage support. | |
| Jan 2022 | 3.70% | 4.60% | -10bp (1Y), -5bp (5Y) | Part of early 2022 easing cycle. |
Conclusion
In conclusion, the upcoming data releases, including New Zealand’s services PMI and China’s Loan Prime Rates, are expected to provide insights into the economic health of the Asia-Pacific region. The improvement in New Zealand’s manufacturing PMI and the stability of China’s LPRs suggest a positive outlook for the region. However, the lack of change in the LPRs may not have a significant impact on the markets. Overall, the data releases will be closely watched by investors and economists to gauge the region’s economic performance and potential future trends.
