Asia-Pacific Week Ahead

     JAPAN

     The focus this week will be on the results of the Bank of Japan's policy

meeting and the central bank's new economic forecasts to be released Tuesday.

The market will eye whether one or more BOJ board members dissent from a

continuation of current policy and argue for more monetary easing, as well as

how much the board cuts its median core CPI forecast for this fiscal year.

     Government

     Shinzo Abe, whose coalition won a two-thirds majority of the Lower House

seats in the Oct. 22 parliamentary elections, will be reelected prime minister

in a special Diet session on Wednesday. Abe is expected to reappoint all the

ministers in the current cabinet and retain senior policymakers in the Liberal

Democratic Party.

     Abe is expected to continue his reflationary policy mix of aggressive

monetary easing, increased fiscal spending and structural reforms. The Bank of

Japan is also expected to maintain its large-scale easing until it achieves its

2% inflation target. BOJ Governor Haruhiko Kuroda's five-year term ends on April

and he could be reappointed.

     Bank of Japan

     The BOJ board is expected to maintain its monetary policy target at its

two-day meeting ending Tuesday as the economy remains on a sustained but modest

recovery track while consumer inflation pressures remain weak. The board also

expected to keep the policy targets of guiding the overnight interest rate at

-0.1% and the 10-year bond yield around zero percent.

     Board member Goushi Kataoka, who dissented at last month's meeting, may do

so again. He argued that the current scale of already large monetary easing was

insufficient to meet the central bank's 2% policy goal by the current target

date of "sometime in fiscal 2019." The focus will be on whether he  formally

calls for more easing and whether any other board member joins him.

     In its quarterly Outlook Report, to be released after the meeting, the

board is expected to revise down its median forecast for core CPI (excluding

fresh food prices) in the current fiscal year from the +1.1% projected in July

to below 1.0% due to stagnating price gains.

     Tuesday, around 12:00 pm JST (0300 GMT: The BOJ releases the outcome of the

two-day policy meeting and the quarterly Outlook Report in which it updates the

board's projections for GDP and CPI through fiscal 2019 with its medium-term

risk analysis. The previous policy meeting on Sept. 20-21 ended at 12:08 JST

(0308 GMT) and the last meeting with the release of the Outlook Report on July

19-20 finished at 12:03 JST (0303 GMT).

     Tuesday, 3:30 pm JST (0630 GMT): BOJ Governor Haruhiko Kuroda holds a news

conference on the board's decision. 

     Tuesday, 5:00 pm JST (0800 GMT): The BOJ releases its Japanese government

bond purchase plans for November. The BOJ is expected to leave the frequency of

its JGB purchases in November unchanged from October, indicating there is no

need to guide any bond yield higher or lower. The BOJ is also expected to leave

its purchase plans for each JGB maturity zone unchanged from October.

     Data

     Monday, 8:50 am JST (2350 GMT): The Ministry of Economy, Trade and Industry

METI releases preliminary September retail sales. The MNI survey median

forecast: +2.5% on year, which would be the 11th straight y/y rise after +1.8%

in August. 

     Tuesday, 8:30 am JST (2330 GMT): The Ministry of Internal Affairs and

Communications releases September household spending and the September

unemployment rate. The MNI survey median forecasts: real spending +0.4% on year,

which would be the second straight rise vs. +0.6% in August; unemployment rate

2.8%, unchanged from August.

     Tuesday, 8:50 am JST (2350 GMT): The METI releases preliminary September

industrial output as well as its outlook for October and November. The MNI

survey median forecast: -1.5% on month, which would be the first m/m drop in two

months vs. +2.0% in August.

     Thursday, 2:00 pm JST (0500 GMT): The Cabinet Office releases the results

of the Consumer Confidence Survey for October. The key consumer confidence index

rose 0.6 point to 43.9 in September on a seasonally adjusted basis, the first

rise in two months, backed by moderate weather and a lull in sabre rattling

between North Korea and the U.S.

     Japanese Government Bonds

     Japanese government bond yields will continue to face upward pressure from

the weak yen and higher stock prices. But a sharp rise in JGB yields is unlikely

due to investor bargain-hunting. A possible correction to the recent yen's fall

would increase downward pressure on bond yields.

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

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

highest level since July 26 after falling to -0.010% on Sept. 8, the lowest

since Nov. 15, 2016.

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

1-3 years and 3-5 years expected.

     Wednesday: The Ministry of Finance to auction Y2.3 trillion of 10-year

bonds and Y4.4 trillion of three-month Treasury discount bills.

     Thursday: BOJ outright purchase operations of JGBs expected.

     Friday: Japanese markets are closed for the Cultural Day public holiday.

     CHINA

     This will have a relatively quiet week following the end of the 19th

Communist Party Congress last week. Most attention will be on PMI data to be

released from Tuesday to gauge the outlook for fourth quarter growth after

stronger-than-expected data for September.

     Tuesday, 09:00 CST (0100 GMT): The official China manufacturing and service

PMIs for October, compiled jointly by the China Federation of Logistics and

Purchasing and the National Bureau of Statistics, are due to be released. The

MNI survey median is for the manufacturing PMI to ease to 52.0. The

manufacturing PMI surged to 52.4 in September, the highest in five years, from

51.7 in August. The services PMI jumped to 55.4 from 53.4 in August.

     Wednesday, 09:45 CST (0145 GMT): The private Caixin manufacturing PMI for

October, compiled by IHS Markit for Caixin magazine, will be released. The gauge

fell to 51.0 from 51.6 in August but remained above the 50 break-even mark for

the fourth consecutive month.

     Friday, 09:45 CST (0145 GMT): The Caixin services PMI for October is due to

be released. The index fell to 50.6 last month, down sharply from 52.7 in August

and the weakest reading since 50.2 in December 2015.

     AUSTRALIA

     Data

     The highlight of the week will be retail sales data to be released Friday,

as surprisingly weak numbers in July and August raised concerns about the

strength of household spending, which is one of the key elements of the RBA's

monetary policy stance.

     Tuesday, 9:30 am AEDT (2230 GMT Monday): ANZ-Roy Morgan's weekly consumer

confidence data will be released.

     Tuesday, 1130 am AEDT (0030 GMT): Private sector credit data for September

will be published by the Reserve Bank of Australia. The MNI survey median

forecast is for a 0.5% m/m rise, the same pace as in August.

     Wednesday, 930 am AEDT (2230 GMT Tuesday): The AI Group publishes its

performance of manufacturing index for October. The index is expected to show

another month of expansion but analysts will be watching to see if there is a

slight moderation in the pace.

     Wednesday, 10:00 am AEDT (2330 GMT Tuesday): CoreLogic will publish its

home value index for October, with expectations for a flat m/m outcome compared

with the 0.2% rise in September. The data will be watched to see if Sydney

records a second straight monthly fall and whether there in a moderation in

price rise in Melbourne.

     Thursday, 11:30 am AEDT (0030 GMT): International trade and building

approvals data will be released at the same time by the Australian Bureau of

Statistics. The MNI survey median forecast is for a trade surplus of A$1.0

billion in September, which would be in line with the surplus in August. The

forecast for dwelling approvals is for a 1.0% m/m fall in September after a 0.4%

rise in August.

     Friday, 9:30 am AEDT (2230 GMT Thursday): The AI Group publishes its

performance of services index, which is also expected to stay in expansion, with

the focus on whether the retail sector shows any improvement from its recent

contractions.

     Friday, 11:30 am AEDT (0030 GMT): Retail sales data for September and for

the third quarter (volume) will be released by the ABS. The MNI survey median

forecast is for a 0.4% m/m rise in September sales but for flat retail volume in

Q3.

     RBA

     No events are scheduled during the week. Data includes private sector

credit on Tuesday and index of commodity prices on Wednesday.

     NEW ZEALAND

     With the new government now sworn in, the focus will return to data this

week, though the market will continue to watch for news on how the government

plans to deliver its new policies, especially those on housing, immigration and

spending.

     Data

     Tuesday, 10:45 am NZDT (2130 GMT Monday): Building consents data for

September will be released by Statistics New Zealand, with the expectation for a

fall after a bumper 10% m/m rise in August.

     Tuesday: 1:00 pm NZDT (0000 GMT): ANZ publishes its business survey for

October, with a chance that confidence will fall into negative territory after

record a flat reading in September. The activity outlook may also ease from 29.6

in September.

     Wednesday, 10:45 am NZDT (2130 GMT Tuesday): Labor market data for Q3 will

be released by Statistics New Zealand, with MNI survey median forecast for a

0.8% q/q gain in employment and a jobless rate of 4.7%, down from 4.8% in Q2.

     RBNZ

     No major data or events are scheduled this week.

[TOPICS: M$A$$$,M$J$$$,M$Q$$$]