Week Ahead for China, Japan, Australia, New Zealand

     SYDNEY (MNI) - BANK OF JAPAN

     The fact that there was only a modest rise in the yen exchange rate amid

heightened concerns about possible military conflict between the United States

and North Korea came as a relief to Bank of Japan officials, as a stronger

exchange rate poses a risk to the central bank's economic and inflation goals.

But renewed safe-haven yen buying will remain a key risk for Japan.

     There are no public speeches by BOJ board members until Aug. 31, when

Takako Masai speaks to business leaders in Matsuyama City, western Japan. The

BOJ's next policy meeting is scheduled for Sept. 20-21.

     JAPANESE DATA

     On Wednesday, the Ministry of Health, Labour and Welfare releases revised

June wages. In preliminary data, total monthly average cash earnings per regular

employee fell 0.4% on year in June, posting the first year-on-year drop in 13

months after rising 0.6% in May, hit by a decline in summer bonuses and

continued weak overtime pay. In real terms, average wages slumped 0.8% on year,

the first drop in three months after being flat in the previous two months.

     On Friday, the Ministry of Internal Affairs and Communications releases

July national, August Tokyo CPI. The MNI median forecasts: core CPI (excluding

fresh food but including energy prices) +0.5% on year for the seventh straight

y/y rise vs. +0.4% in June; central Tokyo core CPI +0.3% on year for the second

straight y/y rise vs. +0.2% in July.

     On Friday, the BOJ releases the July service producer price index (SPPI).

The SPPI rose 0.8% on year in June, the 48th straight year-on-year rise after

+0.8% in each of the previous four months. On the month, the SPPI fell 0.1% in

June.

     JAPANESE GOVERNMENT BONDS

     Japanese government bond yields are likely to move in a tight range unless

a heightened geopolitical risk triggers risk-off mode and prompts safe-having

buying of fixed-income securities. Generally, JGB prices are supported by the

Bank of Japan's outright bond purchase operations, which are expected Wednesday

and Friday.

     Last week the BOJ lowered the scale of its purchase of JGBs with a

remaining life of 5 to 10 years per operation to Y440 billion from Y470 billion.

The cut in JGB buying, the first since July 24, was aimed at preventing the

10-year bond yield from falling further amid continued tight supply-demand

conditions. The 10-year yield fell to 0.045% Tuesday for the lowest level since

June 27. Despite the reduction of JGB buying, the 10-year bond yield dropped to

0.040% Wednesday afternoon for the lowest level since June 7.

     The 10-year JGB yield is seen moving between 0.035% and 0.055% this week

against the bank's target of around zero. The Ministry of Finance will auction

Y1.0 trillion of 20-year bonds Tuesday and Y4.4 trillion of three-month Treasury

discount bills Thursday.

     CHINA

     CHINA

     On Sunday, Aug. 27, data on the combined profits of Chinese industrial

firms for July will be released by the National Bureau of Statistics (NBS).

Industrial profits rose 19.1% year-on-year in June, up 2.4 percentage points

from the 16.7% y/y growth rate in May.

     AUSTRALIA

     It's a quiet week with no major data releases or events due. The lone

release of some interest to markets is ANZ-Roy Morgan's weekly consumer

confidence index due on Tuesday.

     RBA

     No major data or event is due during the week.

     New Zealand

     It's a relatively quiet week with net migration data due on Monday. On

Thursday is international trade data for July where MNI median forecast is for a

deficit of NZ$200 million, after a NZ$242 million surplus in June.

     RBNZ

     No major data or event is due.

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