Week Ahead for China, Japan, Australia, New Zealand

     SYDNEY (MNI) - BANK OF JAPAN

     The Bank of Japan board will hold its next policy meeting on Sept. 20-21.

No change in the yield curve control target is expected. The focus is on Oct.

30-31, when the board updates its medium-term growth and inflation projections

as well as risk analysis. There are no public speeches by BOJ board members

until Sept. 25, when Governor Haruhiko Kuroda speaks to business leaders in

Osaka City, western Japan

     JAPANESE DATA

     Wednesday, the Ministry of Health, Labour and Welfare releases preliminary

July wages. In revised data, total monthly average cash earnings per regular

employee rose 0.4% on year, revised up sharply from a preliminary 0.4% fall.

Average wages now marked the third straight year-on-year increase. In real

terms, average wages slipped 0.1% on year. Base wages, the key to a recovery in

cash earnings, rose 0.5% on year for the third consecutive rise. Overtime pay

fell 0.1% on year while bonuses and other special pay were revised up sharply to

a 0.4% rise from a 1.5% fall.

     Thursday, the Bank of Japan releases its supply-side Consumption Activity

Index for July. In June, the index fell a real 0.1% on a seasonally adjusted

basis for the second straight month-on-month drop after falling 0.5% in May. In

April-June, the index rose 1.1% on quarter in line with strong public

consumption in Q2 GDP data.

     Friday, the Cabinet Office releases revised (second preliminary) gross

domestic product for April-June. The MNI median forecasts: real GDP +0.7 on

quarter, or an annualized 2.7%, revised down sharply from the initial estimate

of 1.0% on quarter, or an annualized 4.0%; business investment +0.2% q/q vs. the

initial reading of +2.4% (forecast range -0.2% to +1.6%).

     Capex appears to be weaker than initially reported following Friday's

release of a quarterly survey of firms by the Ministry of Finance. The MOF

survey based on the demand side is the key to calculating revisions to GDP.

Capex in preliminary GDP is based solely on supply side data. Preliminary data

showed Japan's Goldilocks economy posted exceptionably high growth, as strong

domestic demand -- led by consumption, business investment and public investment

-- offset what is seen as a temporary slip in external demand.

     Friday, the Cabinet Office releases the August Economy Watchers' Survey. In

July, the Watchers' sentiment index for Japan's current economic climate posted

the first month-on-month drop in four months, down 0.3 point at 49.7 in July on

a seasonally adjusted basis after rising sharply by 1.4 points in June, but the

level remained relatively high in the current recovery phase.

     In August, reports of escalated tensions involving North Korea -- with U.S.

President Donald Trump threatening 'fire and fury' if Pyongyang continued its

threats -- prompted brief safe-haven buying of the yen but financial markets

remained relatively stable. Unless the yen appreciates sharply and causes

concerns about exporter profits, job security and wage growth, the sentiment

index is affected by more mundane factors, such as local weather, rather than

geopolitical risks themselves.

     JAPANESE GOVERNMENT BONDS

     Japanese government bond yields are likely to stay at low levels on

continued tight supply-demand conditions and lingering geopolitical risks

heightened by North Korea's nuclear arms threat. JGB yields may rise temporarily

on profit-taking following the recent yield drop. 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 BOJ slightly lowered its purchase

plans per operation for JGBs with a remaining life of 5 to 10 years to a range

of Y300 billion to Y500 billion in September from a range of Y350 billion to

Y550 billion in August in light of a drop in the 10-year bond yield.

     The 10-year JGB yield is seen moving between 0.005% and 0.020% this week

against the bank's target of around zero. It fell to -0.005% Friday, slipping

back into negative territory for the first time since Nov. 16, 2016. A further

drop in 10-year bond yield could prompt the BOJ to consider reducing the

per-operation scale of its purchases of JGBs with a remaining life of 5 to 10

years from Y410 billion. The Ministry of Finance will auction Y2.3 trillion of

10-year bonds Tuesday, Y2.6 trillion of six-month Treasury discount bills

Wednesday and Y800 billion of 30-year bonds and Y4.4 trillion of three-month

Treasury discount bills Thursday.

     CHINA

     On Monday, Caixin magazine is due to publish its service sector PMI for

August, which is compiled by Markit. The headline index inched down to 51.5 in

July, the lowest reading since May 2016, from 51.6 in June.

     Thursday, the People's Bank of China is due to release its foreign change

reserves figures for August. China's forex reserves rose in July for the sixth

month in a row, increasing by $23.93 billion to $3.0807 trillion, The July

reserves level was the highest since October 2016 .

     Friday, monthly trade data for August are set to released by the General

Administration of Customs. Chinese import and export growth both decelerated in

July, indicating worse-than-expected external and domestic demand. July export

growth softened to 7.2%, the lowest since February, while imports increased

11.0%, the slowest growth rate since last December.

     Saturday, Chinese consumer and product price indexes for August are due to

be released by National Bureau of Statistics. Consumer prices and factory

inflation showed stable growth in July despite falling below expectations. The

CPI gained 1.4% y/y in July, lower than the 1.5% growth in July, while the PPI

growth accelerated 5.5% y/y, matching the level of the previous two months.

     AUSTRALIA

     It's a very busy week with Q2 GDP and the RBA's monthly cash rate decision

the key highlights, apart from RBA speeches.

     Monday begins with ANZ job ads data for August where expectation is for

avsmall gain which would extend the recent streak of gains to a sixth month. At

the same time is business indicators data for Q2 where the numbers most closely

watched are inventories and company profits. MNI median forecast for inventories

is for 0.3% q/q rise after a 1.2% increase in Q1. An outcome matching forecast

would mean inventories could subtract around 0.2 points from Q2 GDP. Company

profits are expected to fall 4% q/q, a big drop from 6% rise in Q1. Also,

important in the data would be wages for Q2.

     On Tuesday is AI Group's performance of services index for August which is

expected to show a sixth month of expansion (last 56.4). There's also ANZ-Roy

Morgan's weekly consumer confidence data. Later Tuesday is Balance of Payment

data for Q2 where MNI median forecast is for flat contribution from net exports

to Q2 GDP, compared with a 0.7-point detraction in Q1. Current account balance

is expected to show a deficit of A$7.9 billion, more than double of the A$3.1

billion deficit in Q1. In the afternoon is the RBA's monthly cash rate decision

where the unanimous view once again from economists and the market is for the

rate to be left unchanged at 1.5%.

     On Wednesday is GDP day where MNI median forecast currently stands at 0.8%

q/q and 1.7% y/y, accelerating from +0.3% q/q and +1.7% y/y in Q1. However, the

median may change if economists make significant change to their forecasts

following release of partial data on Monday and Tuesday that go into GDP

calculation.

     On Thursday is AI Group's performance of construction index for August

which is also expected to remain in expansion and near the survey record high of

60.5 touched in July. Later Thursday is retail trade for July where MNI median

forecast is for 0.3% m/m rise, the same pace as June. Also Thursday is

international trade data where expectation is for a surplus of A$900 million in

July which is similar to A$856 million surplus in June.

     On Friday is housing finance for July where MNI median forecast is for 1.3%

m/m rise in number of owner-occupier loans, compared with 0.5% rise in June.

     RBA

     The RBA's September monthly monetary policy decision is due on Tuesday

where the unanimous expectation is for the rate to be left steady at 1.5%. The

same evening Governor Philip Lowe will deliver a speech at the board dinner.

There is no Q&A.

     On Wednesday, RBA's head of economic analysis department Alex Heath speaks

at Economic Society of Australia event in Tasmania. The topic of her speech is

"Structural Change in Australian Industry: the Role of Business Services." There

is also Q&A.

     On Friday, RBA Deputy Governor Guy Debelle speaks at 2017 FINSIA Regulators

event. There is also Q&A. Same evening Governor Lowe speaks at Bank of China

Sydney branch's dinner in Sydney.

     NEW ZEALAND

     It's a light week which includes value of building work done for Q2 on

Tuesday and economic survey of manufacturing on Friday.

     RBNZ

     No major data or event is due from the RBNZ.

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