Week Ahead for China, Japan, Australia, New Zealand

     SYDNEY (MNI) - BANK OF JAPAN

     On Thursday, Bank of Japan board member Takako Masai, a former commercial

banker, speaks to business leaders in Matsuyama City, western Japan, and holds a

news conference later. Masai has been following the reflationary policy stance

of Governor Haruhiko Kuroda.

     Also Thursday, the BOJ releases its Japanese government bond purchase plans

for September. The bank is expected to leave unchanged the frequency of its JGB

in September compared to August and also leave unchanged its purchase plans for

each bond maturity zone. The BOJ stands ready to reduce further the amount of

its purchases of JGBs with a remaining life of 5 to 10 years if market

conditions -- especially the yen exchange rate -- allow, MNI understands.

     JAPANESE DATA

     On Tuesday, the Ministry of Internal Affairs and Communications releases

July household spending, July unemployment rate. The MNI median economist

forecasts: real average household spending +0.6% on year for the second straight

y/y rise on a gradual pickup in consumer sentiment and modest household income

gains vs. +2.3% in June, which was the first y/y rise in 16 months, largely due

to unusually dry weather during this year's rainy season, which led to a sharp

increase in home renovation work compared to a year earlier; the seasonally

adjusted average unemployment rate 2.8% vs. 2.8% in June and 3.1% in May.

     On Wednesday, the Ministry of Economy, Trade and Industry releases

preliminary July retail sales. The MNI median economist forecast: +0.9% on year

for the ninth straight year-on-year rise vs. +2.2% in June. Department store

sales fell 1.4% on year in July, giving up all of the 1.4% gain in June and

posting the first drop in two months, as early summer sales had already taken

place in late June at most stores.

     On Thursday, the METI releases preliminary July industrial output, outlook

for August, September. The MNI median economist forecast: -0.4% on month

(forecast range: +0.4 to -1.4%), the first m/m drop in two months after +2.2% in

June, which was revised up from a preliminary +1.6%. The METI forecast for

factory output based on its survey released last month was +0.8% on month in

July and +3.6% in August. Adjusting the upward bias in output plans, the METI

projected production would fall 0.3% on month in July. But given the high growth

expected in August, the third quarter output is likely to stay on an uptrend.

     On Friday, the Ministry of Finance releases Q2 Financial Statements

Statistics of Corporations by Industry. The MOF survey based on the demand side

is the key to calculating revisions to Q2 GDP due on Sept. 8. Capex in

preliminary GDP is based solely on supply side data. In Q2 GDP data, business

investment surged 2.4% on quarter in Q2 for the third straight quarterly rise

and the pace of growth accelerated sharply from a 0.9% gain in Q1. It pushed up

the Q2 GDP by 0.4 percentage point. Some firms are seeking to raise production

capacity to meet higher demand while others are trying to cope with labor

shortages by investing in machines.

     On Friday, the Cabinet Office releases the results of its August Consumer

Confidence Survey conducted on Aug. 15. In July, the confidence index edged up

0.5 point to 43.8 on a seasonally adjusted basis, posting the first

month-on-month rise in two months on firmer stock markets and stable household

goods prices. The confidence level is considered fairly high but the index has

shown ups and downs in the past several months.

     JAPANESE GOVERNMENT BONDS

     Upward pressure on Japanese government bond yields may increase temporarily

due to profit-taking but a sharp rise in yields is unlikely on the back of

lingering geopolitical risks and continued tight supply-demand conditions. 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 expected Monday, Wednesday and Friday. The 10-year JGB yield is seen moving

between 0.035% and 0.050% this week against the bank's target of around zero. It

fell to 0.020% Thursday for the lowest level since May 2. The Ministry of

Finance will auction Y2.2 trillion of 2-year bonds and Y4.4 trillion of

three-month Treasury discount bills Thursday.

     CHINA

     On Thursday, China's official manufacturing and non-manufacturing PMIs for

August, jointly released by the China Federation of Logistics and Purchasing

(CFLP) and the National Bureau of Statistics (NBS), are due to be released. The

manufacturing PMI fell to 51.4 in July from 51.7 in June, the first fall since

April this year. The services PMI also fell in July, to 54.5 from 54.9 in June,

but remained relatively high, posting the tenth consecutive monthly reading

above the 54 mark.

     On Friday, the Caixin manufacturing PMI for August, produced by Markit, is

due to be released. The index rose to 51.1 in July from 50.4 in June, the

strongest reading since 51.2 in March.

     AUSTRALIA

     The week starts on a quiet note but gets busy with some quarterly releases

and the usual month-end and start-of-the month releases.

     On Wednesday is building approvals data for July where MNI median forecast

is for a 5% m/m fall that is expected to be payback for a strong 10.9% rise in

June. Also Wednesday is construction work done for Q2 where MNI median forecast

is for a 1.0% q/q rise after a 0.7% fall in Q1. 

     On Thursday is private new capex date for Q2 where MNI median forecast is

for 0.2% q/q increase, almost the same pace as 0.3% in Q1. More important in the

data is third estimate of capex for 2017-18 where expectation is for around A$96

billion compared with A$85.4 billion in the second estimate. Also Thursday is

private sector credit data for July published by the RBA where the forecast is

for a 0.5% m/m rise, slightly slower than 0.6% increase in June.

     On Friday, AI Group publishes performance of manufacturing index for August

which is expected to show eleventh straight month of expansion (last 56.0).

Following that is monthly house price data published by CoreLogic which is

expected to reveal around 0.7% m/m rise in August after a 1.5% increase in July.

In the afternoon, the RBA publishes index of commodity prices for August (last

-1.0%).

     RBA

     Data releases include private sector credit for July and index of commodity

prices for August. There's no event scheduled.

     NEW ZEALAND

     The highlight of the week is ANZ's business survey for August due on

Thursday where once again inflation expectations and pricing intentions will be

important, apart from the headline confidence and activity outlook numbers.

     Prior to that on Wednesday is building consents for July which a flat

outcome is expected after 1.0% m/m fall in June. On Friday is terms of trade

data for Q2 where MNI median forecast is for 2% q/q rise after 5.1% increase in

Q1.

     RBNZ

     No major event is due from the RBNZ.

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