Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : MDA - Market Direction Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Les H who wrote (42091)	3/3/2000 12:23:00 PM
From: Les H	Read Replies (1) \| Respond to of 99985

ASIA WATCH: JAPAN Q4 GDP TO BE REPORTED DOWN; NO MOVE SEEN AT BOJ MEETING By Phillip Day HONG KONG (MktNews) - Confirmation will likely come next week that Japan has slipped back into recession, although policymakers are sure to be quick to say they expect this one to be very short-lived. Amid a slew of other Japanese data next week comes a Bank of Japan Monetary Policy Board meeting, Hong Kong's budget and the ongoing deliberations of China's National Peoples Congress. As of late Friday, Japan's Economic Planning Agency had not yet announced the day for the fourth-quarter GDP release, although the EPA confirmed it would come next week. EPA chief Taiichi Sakaiya braced the market for the bad news, saying he expects the result will be negative. He's hinted as much in the past, leading officials to play down concerns of a second contraction in a row. Japanese third-quarter GDP fell 1.0% on the previous quarter. The GDP numbers will highlight the tight squeeze in which Japanese policymakers find themselves. The economy is showing signs of recovery, with Japan's trendy new IT sector booming and financial markets reflecting a fair bit of optimism. But private consumption remains dangerously low, with the average Japanese salaryman keeping a firm hand on his wallet because he's worried about his income, his job and the state of the country's finances when he begins claiming a pension. That last factor means the government must at least pay lip service to the need to address its bulging debt, while once again using public coffers to simulate the economy until private consumption picks up. Along with those concerns are the desire of Japanese leaders to make a good showing on the world stage at the July G-8 summit they're hosting, which they hope will also show them off as statesmen before the election that must be held this year. The last thing the government wants is to be badgered by its G-8 allies over the state of its economy at the summit. An election is also beginning to loom, and politicians are already salivating at the thought of another big stimulus package they can aim where it will bring in the most votes. At the same time, the country's re-entry into a technical recession should also help the government drown out any cries from the opposition that its spending is out of control. Expect the GDP numbers to be closely followed by talk of the extra budget, which leaders will probably say will be the last before the economy recovers. Honest. The GDP numbers may also quiet some of those suggesting the BOJ should move away from its zero-interest-rate policy. That isn't likely to happen at the BOJ meeting Wednesday, however. The minutes of the January 17 Monetary Policy Board meeting this week once again contained discussions about how long the policy should remain in place, talk that has been reflected in most minutes since the policy began. But some Japanese media took the discussion as a signal that board members are getting more serious about ending the policy. Finance Minister Kiichi Miyazawa said Friday the discussions themselves are not surprising but he doesn't expect a change in BOJ policy until the economy picks up, which he expects in September at the earliest. As well as the BOJ meeting Wednesday, Japan will also release household spending figures on Monday, the EPA's diffusion indexes on Tuesday and the wholesale price index and bank lending on Wednesday. Machinery orders will be released Thursday and Friday brings the BOJ's monthly report for March. Besides the GDP report, machinery orders may give the best indication of future growth, as they tend to be a more forward-looking indicator than some of the other data. Outside of Japan, Hong Kong's fiscal 2000 budget will be released Wednesday. The most controversial item expected is a new tax. After floating the idea of a sales tax, it looks most likely that Finance Secretary Donald Tsang will announce a tax on people leaving the territory by land. While those leaving by air have long had to pay a departure tax, critics say the land departure tax is unfair because it will hit the thousands of less well-off who travel across the border each day to mainland China for work or shopping. China's National Peoples Congress begins Sunday. It is in effect the country's budget deliberations and while nothing major is likely to emerge, there may be some hints as to the future direction of foreign exchange policy. Local media have reported interviews with officials lately who seem to be floating trial balloons on the idea of widening the trading band of the yuan, which is pegged to the U.S. dollar. A widening of the band could be the first step in the eventual trading of the currency.