The economic calendar is fairly tame compared to last week’s overload of significant releases. The preliminary estimate of Augusts’ Leading Index are expected to show the metric rose for the sixth consecutive month, pointing to continued moderation in economic growth in the coming 6-9 months from the lows registered in the first quarter. On balance, much of this has already been priced into the exchange rate and is unlikely to produce a significant response from the market, with traders much more sensitive to negative news after seven months of buoyant confidence. The Current Account surplus is set to narrow to 1148.0 billion yen in August from 1265.6 billion in the previous month as exports continue to tumble on lackluster foreign demand. Indeed, last week’s Tankan survey of large manufacturers (who primarily cater to the overseas buyers) revealed firms expect sales to fall -10.5% through the 2009 fiscal year (12 months ending April 2010), more than doubling the drop in FY2008.
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