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Asia-Pacific Week Ahead

     CHINA
     The highlight of the week will be the results of the Central Economic Work
Conference, which will set the economic and financial policy agenda for next
year.
     Policy:
     Monday: The annual Chinese government's annual Central Economic Work
Conference will be held. The meeting of top officials will set the economic and
financial policy priorities for 2018, to be formalized by the National People's
Congress next March. President Xi Jinping and Premier Li Keqiang will address
the meeting, which will follow themes set by the Politburo Standing Committee,
including discussions of next year's growth target, greater emphasize of the
quality rather than the quantity of economic output, greater risk prevention in
the financial sector, enhancements in poverty alleviation and stronger pollution
controls. The top-level meeting is expected last three days, with a summary of
its recommendations to be released by the official Xinhua News Agency following
its conclusion.
     Data:
     Monday, 9:30 am CST (0130 GMT): National Bureau of Statistics to release
November housing price data for 70 major cities, with price growth expected to
have cooled further. New home prices rose in 60 cities in October on an annual
basis, fewer than the 67 in September.
     JAPAN
     The Bank of Japan is widely expected to leave its policy target unchanged
at its board meeting at its two-day board meeting ending Thursday. Governor
Haruhiko Kuroda has been saying the current nearly flat yield curve is
appropriate for supporting sustained economic growth and a path toward the
bank's 2% inflation target.
     This week, the Cabinet Office will release the government's growth and
inflation forecasts for fiscal 2018, which will be used to draft the budget for
the next fiscal year. It is expected to forecast real GDP growth of 1.8%, above
the average economist projection just above 1%.
     The government's tax reform plan to be drafted last week is unlikely to be
successful in boosting business investment or wage hikes as intended
     and won't have any benefit at all for the growing number low-income
     earners in the country. Prime Minister Shinzo Abe is hoping to take credit
for wage hikes through government-brokered annual labor-management talks but
many firms are cautious about raising fixed labor costs, resulting in a slow
wage increase and thus lackluster consumer spending.
     Trade data for November to be released Monday is expected to show the first
trade deficit in six months as the pace of imports outpaced that of exports,
reflecting the release of the popular iPhone X last month. Economists do not
expect domestic demand to rise sharply enough to cause a persistent trade
deficit in Japan.
     Bank of Japan:
     The Bank of Japan board will maintain the current pace of monetary easing
at its two-day policy meeting ending on Thursday as it engages in a prolonged
battle to push up slow inflation below 1% to a stable 2%. The economy has
continued expanding moderately as the board predicted at its last meeting on
Oct. 30-31 and a moderate economic expansion is likely to continue based on
balanced domestic and overseas demand, BOJ officials believe. The market is
already looking ahead to the BOJ's Jan. 22-23 meeting, when the board will
update its growth and inflation outlook in its quarterly Outlook Report.
     Thursday, around 12 pm JST (0300 GMT): The BOJ releases the outcome of its
meeting in its policy statement.
     Thursday, 3:30 pm JST (0630 GMT): BOJ Governor Haruhiko Kuroda holds a news
conference to discuss the board's decision.
     Data:
     Monday, 8:50 am JST (2350 GMT Sunday): The Ministry of Finance releases
November trade. The MNI median forecast: exports +14.6% on year for the 12th
straight y/y rise vs. +14.0% in October; imports +18.8% on year for the 11th
straight y/y gain vs. +18.9% in October; a trade deficit of Y56.5 billion
(forecasts range from a deficit of Y313.1 billion to a surplus of Y224.5
billion), the first shortfall in six months vs. a surplus of Y284.6 billion in
October and a surplus of Y146.5 billion in November 2016. 
     Monday, 8:50 am JST (2350 GMT Sunday): The BOJ releases inflation Outlook
for firms polled in its quarterly Tankan survey, the main portions of which was
released on Dec. 15. In the September Tankan, firms on average expected the
annual consumer inflation rate to stand at 0.7% in a year, down from 0.8% in
June. Firm's inflation forecasts for three and five years ahead were unchanged
at 1.1% each.
     Monday, 2 pm JST (0500 GMT) The BOJ releases its November real trade
indexes. The real export index calculated by the BOJ based on the Ministry of
Finance's trade data rose 2.6% on month in October for the first rise in two
months vs. -5.4% in September.
     Wednesday, 8:50 am JST (2350 GMT Tuesday): The BOJ releases its preliminary
flow of funds for July-September.
     Friday, 9 am JST (0000 GMT): The Ministry of Health, Labour and Welfare
releases revised October wages. In preliminary data, total monthly average cash
earnings per regular employee rose 0.6% on year in October, posting the third
straight year-on-year rise after +0.9% in September, but real wages remained
slow to recover. In real terms, average wages rose 0.2% on year, the first y/y
rise in 10 months after sliding 0.1% in September, but it was because fresh food
fell, pushing down the total CPI rise.
     Japanese Government Bonds"
     Japanese government bond yields are likely to move a tight range ahead of
the BOJ policy meeting on Dec. 20.21 unless U.S. Treasury yields fluctuate
sharply. The benchmark status of bond futures shifted to the March contract last
week. Upward pressure on JGB yields may rise temporarily as inventors lock in
profits ahead of the year-end. The 10-year JGB yield is expected to move between
0.030% and 0.060% this week against the bank's target of around zero.
     Monday: The Ministry of Finance to auction Y2.3 trillion of 1-year Treasury
discount bills. BOJ outright purchase operations for JGBs with remaining life of
1-3, 3-5 and 5-10 years expected.
     Wednesday: The MOF to auction Y4.4 trillion of three-month Treasury
discount bills. BOJ outright purchase operations for JGBs with remaining life of
1-3, 3-5, 10-25 and more than 25 years expected.
     AUSTRALIA
     The highlight of a quiet week will be the minutes of the Reserve Bank of
Australia's December board meeting to be released Tuesday.
     RBA:
     Tuesday, 1130 am AEDT (0030 GMT): The RBA will publish the minutes of its
December board meeting. Commentary on wage growth and household consumption may
provide dovish tones and offset positive commentary on non-mining business
investment.
     Data:
     Tuesday, 9:30 am AEDT (2230 GMT Monday): ANZ-Roy Morgan publishes its
weekly consumer confidence index.
     Wednesday, 10:30 am AEDT (2330 GMT Tuesday): Westpac-MI publishes its
leading index for November. In October, the index marked the first above-trend
momentum since mid-year and the latest update could see a further rise.
According to Westpac, there are mostly positive data to account for, including a
rise in consumer expectations index, a rise in commodity prices, a fall in
unemployment expectations and an increase in total hours worked.
     NEW ZEALAND
     The highlights of the week are third quarter GDP data for Q3 and ANZ's
latest business survey.
     Data:
     Tuesday, 1 pm NZDT (0000 GMT): ANZ publishes its business survey for
December. Business confidence could show some rebound from a deeply negative
-39.3 in November. More important are whether inflation expectations and pricing
intentions rise further and the outlook for interest rates.
     Wednesday, 10:45 am NZDT (2145 GMT Wednesday): Trade and net migration data
for November as well as balance of payments data for Q3. The expectation is that
the current account deficit will narrow to around 2.5% of GDP from 2.8% in Q2.
     Thursday, 10:45 am NZDT (2145 GMT Wednesday): GDP data for Q3 will be
released. The expectation is for growth to slow to 0.6% q/q from +0.8% in Q2.
     RBNZ:
     No major data or event is due from the RBNZ

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