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Bank of Thailand, South Korea GDP, Japan inflation on tap this week

The Bank of Thailand will face a tough policy decision, while South Kore will release its fourth-quarter growth report and Japan offers up an inflation reading in a holiday shortened week.

On Wednesday the Bank of Thailand (BOT) will weigh in on monetary policy, faced with choosing between cutting interest rates to bolster a flagging economy or keeping them on hold amid rising concerns about debt levels.

Moody's Analytics expects the BOT to stand pat with its current 1.5 percent benchmark rate.

"The Thai economy is off to a poor start in 2016. Weak external demand continues to be a drag on exports. This is hitting export-oriented manufacturers, leading to declining industrial production. The domestic economy is not faring much better," it said in a note Friday.

"While these conditions would suggest an easing of monetary policy, we think this is unlikely. There are rising concerns about private debt levels, which would only be exacerbated by lower interest rates."

In Japan, a reading on the country's closely watched inflation rate is due on Friday.

Moody's Analytics is expecting the consumer price index for February remained flat.

"Price pressures are dissipating across Japan as oil prices continue to fall while growth remains elusive," it said.

The Bank of Japan (BOJ) has struggled to boost the economy out of deflation and toward a 2 percent inflation target, turning on January 29 to a negative interest rate policy to encourage banks to lend more.

The minutes of the BOJ meeting in January, released last week, showed that some members of the monetary policy committee were concerned the inflation target wouldn't be reached within the forecast period of early 2017.

Moody's is equally skeptical.

"We believe prices won't rise any time soon. The Bank of Japan's bold negative rate experiment is unlikely to spur spending, and as wage growth disappoints, inflation will remain mute," the analysts said.


On Thursday, Singapore's government will release its budget for the 2016-17 fiscal year.

Social spending sweeteners have dominated financial planning in Singapore, one of the world's most expensive cities, in recent years. But this year, the government is set to take a more prudent approach and instead focus on boosting an economy at risk of technical recession.

South Korea will report its final gross domestic product (GDP) data for the fourth quarter of 2015 on Friday. Moody's Analytics forecasts a quarter-on-quarter rise of 0.7 percent, slightly higher than the preliminary 0.6 percent estimate.

"Accommodative monetary policy combined with a number of government spending initiatives supported domestic demand through the quarter, while exports improved after a disappointing third quarter," it said.

Among other data due in Asia this week, February industrial production is due from Singapore on Thursday and Taiwan on Wednesday. On Wednesday, both Singapore and Malaysia will deliver February inflation data.

The data come as Asia faces a holiday shortened week. Japan's markets will be closed Monday for the vernal equinox day. On Thursday, India's markets will be closed for the Holi holiday, while the Philippines is shuttered for the Maundy Thursday holiday.

On the Good Friday holiday, markets will be closed in Australia, Hong Kong, India, Indonesia, New Zealand, the Philippines and Singapore.

The Philippine central bank, Bangko Sentral Ng Pilipinas, will hold a monetary policy meeting on Wednesday.

On Tuesday, markets will watch for comments from the Reserve Bank of Australia Governor Glenn Stevens, who will deliver a speech at the Australian Securities and Investments Commission's annual forum in Sydney.

And Myanmar is expected to mark a significant event on Friday for its stock exchange: Conglomerate First Myanmar Investment will become the first company to list on the Yangon Stock Exchange.


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