Asia-Pacific Week Ahead

     JAPAN

     The focus this week will be on the outlook for next Sunday's Lower House

election. Prime Minister Shinzo Abe's ruling coalition is expected to retain its

majority, but the market will be watching to see the size of that majority. A

big win would give Abe a clear mandate to continue pursuing his reflationary

policies, while a small win could force him to trim back his policies or change

direction.

     Bank of Japan

     Wednesday, 10:30 am JST (0130 GMT): BOJ board member Makoto Sakurai speaks

to business leaders in Hakodate City, northern Japan. 2:00 pm JST (1400 GMT):

Sakurai holds a news conference in Hakodate. He is seen as supporting the BOJ's

reflationary policy of BOJ Governor Haruhiko Kuroda.

     Friday, 3:35 pm JST (0635 GMT): BOJ Governor Kuroda delivers a brief speech

at the annual meeting of credit unions in Tokyo.

     Japan Data

     Thursday, 8:50 am JST (2350 GMT): The Ministry of Finance releases

September trade data. MNI median forecast: exports +14.9% on year, which would

be the 10th straight rise, following +18.1% in August. Imports +14.6% on year,

which would be the ninth straight rise following +15.2% in August. The trade

balance is expected to be in surplus by Y565.1 billion, the fourth straight

positive figure following a surplus of Y112.6 billion in August and a surplus of

Y486.6 billion in September 2016.

     Friday, 9:00 am JST (0000 GMT): The Ministry of Health, Labour and Welfare

releases revised August wages. Preliminary data showed total monthly average

cash earnings per regular employee rose 0.9% on year in August, the first

year-on-year rise in two months after falling 0.6% in July. The gain was led by

a rise in summer bonuses after a sharp drop in July as well as a large gain in

overtime pay. In real terms, average wages edged up 0.1% on year, the first rise

in eight months after falling 1.1% in July. Base wages, the key to a recovery in

cash earnings, rose 0.4% on year in August, the fifth straight rise but the pace

of increase slowed from the recent high of +0.7% in May. 

     Other Events

     Oct. 20-21: APEC finance ministers meet in Vietnam.

     Sunday, Oct. 22: Lower House election. Japanese Prime Minister Shinzo Abe's

ruling coalition is expected to retain its majority in the lower house, winning

about 300 of the 465 seats up for grabs. If Abe stays in power, he is expected

to continue his reflationary policy mix of aggressive monetary easing, increased

fiscal spending and structural reforms. In that case, the BOJ will maintain its

large-scale easing until it achieves its 2% inflation target under Governor

Haruhiko Kuroda and any successor. Kuroda's five-year term ends on April 8 and

it is unclear if he will be re-nominated or replaced.

     Japanese Government Bonds

     Japanese government bond prices will likely seesaw amid uncertainty over

the results of the Lower House election on Oct. 22. Upward pressure on JGB

yields may increase further if the Nikkei stock index extends gains. JGBs will

also be supported by local newspapers' surveys that indicate Abe's ruling

coalition will retain its majority in the Lower House.

     The 10-year JGB yield is expected to move between 0.040% and 0.080% this

week against the bank's target of around zero. It rose to 0.080% on Oct. 3, the

highest level since July 26, after falling to -0.015% on Sept. 8, the lowest

since Nov. 15, 2016.

     Monday: BOJ outright purchase operations for JGBs with remaining life of

1-3, 3-5, 5-10 years expected.

     Tuesday: The Ministry of Finance to auction Y1.0 trillion of 20-year bonds.

     Wednesday: The MOF to auction Y2.3 trillion of 1-year Treasury discount

bills. BOJ outright purchase operations for JGBs with remaining life of 10-25

and more than 25 years expected.

     Thursday: The MOF to auction Y2.2 trillion of 5-year bonds and Y4.4

trillion of three-month Treasury discount bills.

     Friday: BOJ outright purchase operations for JGBs with remaining life of

1-3, 3-5 and 5-10 years expected.

     CHINA

     The focus this week will be dominated by the 19th Communist Party Congress,

which begins Wednesday in Beijing. President Xi Jinping is fully expected to be

awarded a second five-year term, but market will focus on the make-up of the

Politburo Standing Committee, the seven-member panel that sets policy for the

country. According to current retirement age rules, five of the seven members,

all except Xi and Prime Minister Li Keqiang, should be replaced. Xi is expected

to push for party members loyal to him to fill those slots. The market will be

watching whether Xi will ignore the retirement rules and reappoint Wang Qishan

-- a Xi ally who heads his anti-corruption campaign -- to the standing

committee. Analysts would likely interpret this as a sign that Xi will seek a

third term in 2022, breaking with the recent tradition of presidents stepping

down after two terms.

     The market will also watch closely key data due on Thursday to see if

economic momentum eased or strengthened at the end of the third quarter. An

easing would reinforce expectations that growth will slow in Q4 from the

still-strong gain expected in the third. Stronger data could suggest that fourth

quarter growth may not be as bad as some expect.

     Economic Data

     Monday, about 09:30 CST (0130 GMT): CPI and PPI are due to be released by

National Bureau of Statistics. Both expanded at stronger-than-expected rates in

August. The MNI survey median sees PPI rising 6.4% in September, accelerating

from 6.3% y/y last month and 5.5% in July. CPI is seen moderating to 1.6% in

September from 1.8% in August, but remaining above the 1.4% rate in July.

     Thursday at 10:00 CST (0200 GMT): Q3 GDP, September retail sales and

industrial production as well as January-September fixed-asset investment data

will be released by the National Bureau of Statistics. The MNI survey median

sees GDP softening slightly to 6.8% y/y after the unexpected strong growth of

6.9% in each of the first two quarters. Retail sales growth rate is expected to

rise 10.1% year-on-year, the same rate as in August. Industrial production is

estimated to grow 6.5% y/y, accelerating from 6.0% in August. The growth rate of

fixed-asset in the first nine months of the year is seen at 7.7%, unchanged from

the January-August rate.

     Other Events

     Wednesday: The Chinese Communist Party will begin its 19th Party Congress

to install the country's next generation of leaders. This twice-a-decade

leadership transition is particularly noteworthy given China's expanding

economic ambitions and increasingly active role in global governance. It also

comes ahead of U.S. President Donald Trump's highly anticipated first visit to

the region in November at a time of high tensions on the Korean Peninsula. More

than usual, the international community is watching to see how China, under

President Xi Jinping's leadership, will chart its future course. The personnel

appointments to the Politburo Standing Committee, China's top political body,

will provide indications of Xi's success in consolidating his power and the

popularity of his policy agenda.

     AUSTRALIA

     The highlight of the week is labor force survey for September after a

bumper report the month before that was strong on all measures.

     After a quiet Monday, on Tuesday at 0930 hours is ANZ-Roy Morgan's weekly

consumer confidence data. At 1130 hours, RBA publishes the minutes of the

October board meeting. The minutes could provide more insights into the risks

the RBA sees for its forecasts, as it balances the recent positive data with

some disappointing data, especially on the household consumption side. Also, at

1130 hours, RBA Assistant Governor Luci Ellis speaks at a panel discussion at a

Citi investment conference in Sydney. There is also Q&A at this event.

     On Wednesday, at 1030 hours Westpac-MI publishes leading index for

September which could point to below trend growth. On Thursday at 1130 hours,

the ABS publishes labor force survey for September where MNI median forecast is

for a rise of 15,000 jobs after a sharp gain of 54,200 jobs in August. The

unemployment rate is expected to remain unchanged at 5.6% and the participation

rate is also expected to stay at 65.3%. The range of jobs growth is wide from

-10,000 to +25,000. Later at 1210 hours, RBA Assistant Governor Michele Bullock

speaks at an event organized by Australian Shareholders Association. There's

also Q&A.

     RBA

     The minutes of October board meeting is due on Tuesday. Also Tuesday is a

panel discussion by Assistant Governor Luci Ellis and on Thursday there's

speech/Q&A by Assistant Governor Michele Bullock.

     NEW ZEALAND

     The highlight of the week is consumer price index inflation data for Q3 but

the spotlight will be shared by political developments with announcement likely

on who will form the next government. The NZ First party board is meeting on

Monday, so an announcement is likely late Monday or Tuesday at the earliest.

     The Q3 CPI data is due Tuesday at 1045 hours and MNI median forecast is for

0.4% q/q and 1.7% y/y, compared with flat q/q and 1.7% in Q2. In the afternoon

at 1500 hours, RBNZ will publish its own sectoral factor model for Q3 CPI which

has more relevance for its monetary policy.

     On Friday at 1045 hours is migration data for September which could show a

small slowing in net migration.

     RBNZ

     No major event is due during the week. Data releases include publication of

sector factor model of Q2 CPI on Tuesday.

--MNI Sydney Bureau; tel: +61 2-9716-5467; email: sophia.rodrigues@marketnews.com

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