The Bank of Japan will announce its first decision in 2011 this week

The Asian region awaits a week full of fundamentals along with central
bank decisions, which is expected to affect the performance of
financial markets and investors' outlook expectations. The outlook is
different regarding monetary policies in Asian nations along with
different objectives both in terms of growth support or the fight
against inflation and deflation.

The Bank of Japan (BoJ) stuck with the program of buying corporate
bonds under the government's plans of stimulating financial markets
and supporting companies through facilitating lending to stimulate the
recovery.

The bank held the program at 5 trillion yen (60 billion dollars) under
the stimulus plan of buying corporate bonds, whereas they proceeded in
buying real estate investment securities in order to support real
estate companies to complete their projects through the banks
purchases of bonds in these companies.

The high return on bonds witnessed in Japan recently is undesirable by
policy makers, due the damage to the economy and the pressure on the
companies that will pay that return, and may impede its obligations to
the government that will be prompted to pay dues on the long run.
The Japanese economy will also release this week the unemployment rate
during the month of December which is expected to remain stable at
5.1%, while retail sales are expected to decline by 1.4% during the
same month after 1.9%.

The Reserve Bank of New Zealand (RBNZ) will also announce this week
its interest rates decision where they are expected to be left steady
at 3.00% for the third consecutive meeting. This comes after the bank
said that the monetary tightening will be very limited considering the
outlook for the recovery, especially after the earthquake.

The New Zealand economy contracted by 0.2% during the third quarter of
2010 after the earthquake, which caused damage to much of the
infrastructure that hammered the recovery.

The current focus for the RBNZ is supporting growth which is keeping
the bank from raising rates from 3.00%, especially in light of the
constant inflation rates at appropriate level for the central bank,
which will prolong the period of maintaining interest rates at current
levels.
Source: Fxstreet.com