By Michael Kitchen, MarketWatch
LOS ANGELES (MarketWatch) -- Key Japanese earnings and Chinese
manufacturing data will likely be key to trading action in Asia in
the coming week.
With Japan's earnings season in full swing, a number of closely
watched blue chips are due to announce interim results.
Honda Motor Co. (HMC) and Panasonic Corp. (PC) are slated for
Monday, Hitachi Ltd. (HIT) results are due Tuesday, and Sony Corp.
(SNE) and Nissan Motor Co. (NSANY) are set to announce on
Wednesday.
Many of these firms have seen their production -- just
recovering from March's catastrophic earthquake and tsunami -- hit
by flooding in Thailand, shutting their plants or those of their
suppliers.
Sony, for instance, said earlier this month that it would delay
the launch of new digital cameras due to Thailand-related
production issues, while Honda has seen the disaster shut
production lines in the Southeast Asian country.
Analysts will be watching closely for these companies' earnings
outlooks and any effect from the Thai situation, as well as from a
persistently strong Japanese yen that has eaten into overseas
profit. The U.S. dollar has fallen to around the ¥76 level,
down from around ¥81 this time a year ago.
The earnings themselves may show some of the lingering
post-quake production issues from early in the quarter. Honda, for
instance, is expected to post a 61% drop in second-quarter profit,
according to the median forecast from a Reuters survey.
Meanwhile, a pair of key surveys of China's manufacturing sector
are scheduled for release Tuesday, and are expected to show an
improvement from the previous month.
Last week, HSBC released the preliminary results of its China
Manufacturing Purchasing Managers' Index, which showed a return to
growth.
The so-called "flash" results, based on the initial 85% to 90%
of responses to the survey, yielded a reading of 51.1, up from
September's 49.9 result and above the 50 level that separates
overall expansion from contraction.
The coming week will see the release of the full HSBC survey,
along with a government-sponsored version from the China Federation
of Logistics & Purchasing, which tends to be more weighted
towards larger companies.
Chinese stocks in particular tend to react significantly to the
survey results, which also include sub-component indexes on input
and output prices that will be closely watched for clues to whether
the central bank will ease policy in the near term.
Meanwhile, Australia's central bank will also be in focus, with
a policy decision due out Tuesday.
With third-quarter consumer inflation coming in at relatively
mild levels, speculation has grown that the Reserve Bank of
Australia will trim interest rates.
Also due out from Down Under in the coming week are Australian
retail sales for September, slated for Thursday, and earnings from
Westpac Banking Corp. (WBK).