Week Ahead for China, Japan, Australia, New Zealand

     SYDNEY (MNI) - BANK OF JAPAN

     On Monday, the BOJ releases its JGB purchase plans for August. The focus is

on how the BOJ will change the per-auction size for JGBs with a remaining life

of 5 to 10 years from a range of Y350 billion to Y550 billion. On July 24, the

bank reduced its buying of the zone to Y470 billion from Y500 billion. Earlier

on July 7, it increased the scale of those bond buying to Y500 billion from Y450

billion in order to stop JGB yields from rising fast.

     On Wednesday, BOJ board member Yukitoshi Funo speaks to business leaders in

Sapporo City, northern Japan. Funo, a former Toyota Motor executive will also

hold a news conference.

     JAPANESE DATA

     On Monday, the Ministry of Economy, Trade Industry releases preliminary

June industrial output and its outlook for July, August. The MNI median

forecast: June industrial production +1.6% on month for the first rise in two

months vs -3.6% in May. Last month the government maintained its assessment,

saying industrial production "shows signs of a pickup." Both output and

shipments fell in May but the recent buildup in inventories eased and factory

operators expected a 2.8% rebound in June.

     On Wednesday, the Cabinet Office releases the outcome of its July Consumer

Confidence Survey. The confidence index fell 0.3 points to 43.3 in June on a

seasonally adjusted basis, posting the first month-on-month drop in two months

after rising 0.4 point to 43.6 in May. However, the confidence level is still

considered fairly high. The government maintained its assessment, saying

confidence was "picking up."

     On Friday, the Ministry of Health, Labor and Welfare releases preliminary

June wages. Total monthly average cash earnings per regular employee rose 0.6%

in May, the second straight y/y rise after +0.5% in April. In real terms,

average wages was unchanged on year in May after being flat in April. Base

wages, the key to a recovery in cash earnings, rose 0.7% on year in May, the

second straight rise after +0.4% in April.

     JAPANESE GOVERNMENT BONDS

     Volatility in the Japanese government bond market may increase temporarily,

depending on the outcome of the BOJ's JGB purchase plans for August. Upward

pressure on JGB yields was somewhat eased as the rising trend of bond yields

overseas has weakened. The BOJ stands ready to contain higher JGB yields in

order to maintain the yield curve that is consistent with the short-term

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

     JGBs are supported by the BOJ's outright bond purchase operations, which

are Monday, Wednesday and Friday. The 10-year JGB yield is seen moving between

0.050% and 0.085% this week against the bank's target of around zero. On July 7,

it rose to 0.105% for the highest level since Feb. 3. The Ministry of Finance

will auction Y2.3 trillion of 10-year bonds on Tuesday and Y400 billion of

10-year inflation indexed bonds and Y4.4 trillion of three-month Treasury

discount bills Thursday.

     CHINA

     On Monday, the official China manufacturing PMI for July, jointly released

by the China Federation of Logistics (CFLP) and Purchasing and the National

Bureau of Statistics (NBS), is due to be published. The median forecast of an

MNI survey of 10 economists is for PMI to ease to 51.5 in July from 51.7 in

June, but remain above May's 51.2. The June reading was the highest since March

(51.8) and the second highest this year. The official services PMI for March is

also due to be released at the same time. It rose to 54.9 in June from 54.5 in

May, the ninth consecutive month that the reading has been above the 54 mark.

     On Tuesday, Caixin magazine is due to release its manufacturing PMI index,

produced by Markit, The headline manufacturing PMI rose to 50.4 in June from

49.6 in May, rebounding back into positive territory from the contraction seen

the month before.

     On Thursday, the Caixin Services PMI index, produced by Markit, is due. The

headline index fell to 51.6 in June, the second lowest reading in 13 months,

from 52.8 in May.

     AUSTRALIA

     It's a busy week where the highlight is the RBA's cash rate decision on

Tuesday, followed by full Statement on Monetary Policy three days later.

     Monday begins with data on private sector credit for June published by the

RBA where MNI median forecast is for 0.4% m/m rise, the same pace as May. Of

more interest is the data on housing credit where investor mortgages are slowing

but owner-occupier mortgages have been showing a slight acceleration.

     On Tuesday is AI Group's performance of manufacturing index for July which

is expected to show another month of expansion (last 55.0). There's also ANZ-Roy

Morgan's weekly consumer confidence data, followed by monthly house price index

by Core-Logic where expectation is for around 1.7% m/m increase in July compared

with +1.8% for June. In the afternoon is RBA's cash rate decision where the

unanimous view of both economists and market is for the rate to be left

unchanged at 1.5%. There will be increased focus on the statement this time

given the recent appreciation in the exchange rate. Later in the afternoon is

index on commodity prices for July published by the RBA (last -4.3%). 

     On Wednesday is dwelling approvals data for June where MNI median forecast

is for 1.5% m/m rise, a part-rebound from a 5.6% fall in May. 

     On Thursday AI Group publishes performance of services index for July which

is also expected to show the expansion continuing (last 54.8). Later Thursday is

international trade data for June where MNI median forecast is for a surplus of

A$1.7 billion which is lower than a surplus of A$2.5 billion for May.

     On Friday the RBA publishes quarterly Statement on Monetary Policy which

will be keenly watched for any change in forecasts on growth and inflation given

assumption of market pricing for cash rate hike and recent rise in the exchange

rate. Market will also be looking for more commentary on the currency. Also

Friday is retail sales data for June where MNI median forecast is for a small

0.1% m/m rise in sales, slowing from a 0.6% growth in May. Retail sales for Q2

will be also be published which is expected to show a 1.3% q/q rise, a sharp

acceleration from just 0.1% in Q1.

     RBA

     Data during the week includes private sector credit, RBA's cash rate

decision, index of commodity prices and quarterly Statement on Monetary Policy.

     NEW ZEALAND

     The highlight of the week is labor market statistics for Q2 due on

Wednesday. MNI median forecast is for 0.9% q/q gain in employment but also a

rise in the labor participation rate to a record high of 70.7% which is expected

to keep jobless rate unchanged at 4.9%. Labor cost index is expected to rise

0.4% q/q in Q2, the same pace as Q1.

     Other data releases during the week include building consents for June on

Monday which is expected to show a decline after 7.0% m/m rise in May. Also

Monday is ANZ's monthly business survey which is expected to show both

confidence and activity outlook at elevated levels.

     RBNZ

     No major data or event is due from the RBNZ

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