Asia week ahead: A quiet week on the cards

It’s a quiet week ahead for China. The loan prime rates will be announced on Wednesday, where no change is expected after the People's Bank of China has so far held rates unchanged this month. There are no major data releases expected in the next week.

Taiwan publishes its export orders data on Wednesday afternoon, where we are expecting export orders to moderate slightly to around 2% growth. Taiwan also publishes its unemployment rate on Friday, which is expected to remain stable at around 3.4%.

Japan's data should show that activity is gradually returning to normal, recovering from several one-off production disruptions. Reflecting this, PMIs should improve. The manufacturing PMI is expected to remain below the neutral level, while the services PMI should rebound, supported by temporary tax cuts and higher income growth.

Exports are expected to rebound by 1.7% yoy after falling by -1.7% in September, while imports are expected to decline by -4.5% amid falling global commodity prices. Meanwhile, we expect headline inflation to ease to 2.3% year-on-year in October, but mainly due to last year's high base. Monthly growth should pick up to 0.6%, combined with the end of the energy subsidy programme and solid increases in services prices.

We see a higher probability of Bank Indonesia keeping rates unchanged. While we do see room for rate cuts, they are likely to be delayed given the recent weakness in Asian currencies and current domestic policy focus on IDR stability.