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