Week Ahead for Asia-Pacific

     JAPAN

     Key data this week are expected to show that the weak yen and higher stock

prices are fueling spending on luxury goods by wealthy customers, but middle- to

lower-income consumers are remaining frugal and not spending on unnecessary

items due to continued real wage growth.

     Household spending is forecast to have slumped in October as a series of

typhoons pushed up the prices for fresh food. Economists forecast retail sales

also fell on year in October as typhoons hit many parts of the country for two

weekends in a row and there was one fewer Saturday compared to the year before.

New vehicle sales dropped in October, partly due to the suspension of production

and shipments by Nissan in the wake of its below-standard vehicle inspection

scandal. The lingering effects of the introduction of new models has now faded.

     By contrast, industrial production is projected to have rebounded in

October in a bounce-back from the fall in September. The impact of the Nissan

scandal appears to be limited as it does not affect exports. The output drop in

September was due to slower shipments of smartphone parts to China. There were

some issues with parts, delaying the production of the iPhone X, while demand

for the iPhone 8 was slow. Manufacturers planned to increase production of

electronic parts and devices in October and November, according to the Ministry

of Economy and Trade and Industry.

     Bank of Japan

     This week the BOJ releases its earnings for the first half of this fiscal

year, from April 1 to Sept. 30.

     Wednesday, 4 pm JST (0700 GMT): BOJ Deputy Governor Hiroshi Nakaso speaks

at a seminar in Tokyo.

     Thursday, 10:30 am JST (0130 GMT): BOJ board member Yutaka Harada speaks to

business leaders in Fukushima City, northeastern Japan. The former government

economist believes that the central bank's massive asset purchases and cash

injections into the banking system will reflated the economy and lead inflation

target the bank's 2% target.

     Thursday, 2 pm JST (0500 GMT): Harada holds a news conference in Fukushima.

     Thursday, 5 pm JST (0800 GMT): The BOJ releases JGB purchase plans. The BOJ

is likely to leave the frequency of its Japanese government bond purchases in

December unchanged from November and leave its purchase plans for each JGB

maturity zone.

     Data

     Monday, 8:50 am JST (2350 GMT): The BOJ releases the October service

producer price index (SPPI). The September SPPI rose 0.9% on year for the 51st

straight y/y rise vs. +0.8% in August. On month, the SPPI rose 0.1% vs. -0.2% in

August.

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

Industry releases preliminary October retail sales. The MNI median forecast:

-0.4% on year for the first y/y drop in 12 months vs. +2.3% in September.

Industry data showed department store sales fell 1.8% on year in October, the

first drop in three months, as typhoons hit many parts of the country for two

weekends in a row and there was one fewer Saturday compared to the year before.

     Thursday, 8:50 am JST (2350 GMT): The METI releases preliminary October

industrial output, outlook for November, December. The MNI median forecast:

+2.0% on month for the first month-on-month rise in two months following -1.0%

in September. 

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

Communications releases October national and November Tokyo CPI. The MNI median

forecasts: October core CPI +0.8% on year, which would be the 10th straight y/y

rise, up from +0.7% in September; November Tokyo core CPI +0.6% on year vs.

+0.6% in October.

     Friday, 8:30 am (2330 GMT): October household spending data to be released.

MNI survey forecast: -0.4% on year, which would be the second consecutive drop

after -0.3% in September.

     Friday, 8:30 am (2330 GMT): October employment and unemployment data to be

released. MNI survey median: October unemployment rate 2.8%, unchanged from

September, remaining at the lowest since June 1994, when it was also at 2.8%.

     Friday, 8:50 am JST (2350 GMT): The MOF releases Q3 Financial Statements

Statistics of Corporations by Industry, key to calculating revisions to capital

investment and inventories for the July-September GDP report due on Dec. 8.

Preliminary Q3 GDP data showed the economy posted a modest 0.3% rise on quarter,

or an annualized 1.4%, as a rebound in net exports offset a slump in consumer

spending caused by bad weather. Capex rose 0.2% on quarter, the fourth straight

q/q increase, but it made zero contribution to the Q3 GDP. Private-sector

inventories pushed up the total domestic output by 0.2 percentage point.

     Japanese Government Bonds

     Downward pressure on Japanese government bond yields may emerge if the yen

remains relatively firm against the dollar. But a sharp drop in JGB yields is

unlikely as bond players remain cautious about buying at low levels. The 10-year

JGB yield is expected to move between 0.010% and 0.050% this week against the

bank's target of around zero. The 10-year bond yield fell to 0.020% on

Wednesday, the lowest level since Nov. 8.

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

1-3 and 3-5 years expected.

     Tuesday: The Ministry of Finance to auction Y500 billion of 40-year bonds.

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

5-10, 10-25 and more than 25 years expected.  

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

trillion of three-month Treasury discount bills.

     Friday: BOJ outright purchase operations for JGBs expected.

     CHINA

     The highlight of the week will be the official manufacturing and service

PMIs on Thursday to see if there is a rebound or if the weakness seen in October

continues.

     Data

     Monday at 9:30 am CST (01:30 GMT): Data on the combined profits of Chinese

industrial firms for October will be released by the National Bureau of

Statistics (NBS). Profits rose 27.7% y/y in September, with the growth rate

accelerating 3.7 percentage points from that in August. The September growth

rate was the highest since data on industrial profits became available in

February 2012.

     Thursday at 9:00 am CST (0100 GMT): The official China manufacturing and

service PMIs, jointly released by the China Federation of Logistics and

Purchasing and the NBS, will be released. The manufacturing PMI fell to 51.6 in

October from 52.4 in September. It was the first decline in three months after

the headline reading surged to its highest level in five years in September. The

CFLP services PMI remained solid in October at 54.3, but declined from

September's 55.4 reading.

     Friday at 09:45 am CST (0145 GMT): The private Caixin manufacturing PMI,

compiled by IHS Markit for Caixin, will be released. The gauge stood at 51.0 in

October, unchanged from September, but remained above the 50 break-even mark for

fifth consecutive month.

     AUSTRALIA

     The highlight of the week is capital expenditure survey data to be released

Thursday.

     Data

     Tuesday, 9:30 am AEDT (22:30 GMT Monday): ANZ-Roy Morgan's weekly consumer

confidence index. It will be interesting to see if confidence sustains the rise

to 16-week high seen last week given political uncertainty could increase

following Labour's likely win in Queensland state election.

     Thursday, 11:30 am AEDT (0030 GMT): Q3 private capital expenditure (capex)

survey data to be released by the Australian Bureau of Statistics. The MNI

survey median forecast is for 0.8% q/q rise, a pace similar to Q2. The data will

also show estimate number four for 2017-18 capex, with the MNI median forecast

for A$106 billion, which would be a slight increase from around A$102 billion in

estimate three.

     Thursday, 11:30 am AEDT (0030 GMT): The ABS will release building approvals

for October, with the MNI survey median calling for a 1.5% m/m fall after a 1.5%

rise in September.

     Thursday, 11:30 am AEDT (0030 GMT): The RBA to release private sector

credit data, with MNI survey median forecast for a 0.4% m/m rise in October

after a 0.3% rise in September.

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

of manufacturing index for November, with the risk the index could fall into

contraction (last 51.1).

     Friday, 10:00 am AEDT (2300 GMT Thursday): Corelogic publishes its home

value index for November, with the expectation for a small m/m fall after flat

outcome in October.

     RBA

     No major events due from the RBA.

     NEW ZEALAND

     It's a light week with the highlight the release of RBNZ's Financial

Stability Report on Wednesday. 

     RBNZ

     Wednesday, 9:00 am NZDT (2000 GMT Tuesday): The RBNZ to publish its

semi-annual Financial Stability Report. There's increased interest in the report

due to expectations that the RBNZ may announce it is scaling back its

macro-prudential measures, or plans to do so in future, if the housing market

continues to moderate. There's also a media conference at 11:00 am NZDT (2200

GMT Tuesday).

     Data

     Friday, 10:45 am NZDT (2145 GMT Thursday): Statistics New Zealand to

release terms of trade for Q3, with the MNI survey median forecast a 0.9% q/q

rise after a 1.5% gain in Q2.

--MNI BEIJING Bureau; +1 202-371-2121; email: john.carter@mni-news.com