Nikkei dips while yen surges in Asian session on reports that prime minister Shinzo Abe would announce a less bold than expected stimulus package. USD/JPY is trading at around 104.4 at the time of writing, comparing to this week's high of 106.7. Meanwhile, Nikkei is down -1.5% at the time of writing. Nikkei business daily reported that the government will inject JPY 6T in direct spending with the stimulus package. That was double of the original expectation. However, the spreading will be spread over a few years. That suggested that a much lower initial impact to the economy. Indirectly, the news suggested that BoJ might announce a less than expected easing later in the week, or even stand pat. Released from Japan, corporate service price index rose 0.2% yoy in June.
New Zealand trade surplus narrowed to NZD 127m in June, basically inline with expectation of NZD 128m. Imports dropped -4.6% yoy to NZD 4.13b. Exports dropped -2.6% yoy to NZD 4.26b. Kiwi is steady after the release. Overall, markets are expecting RBNZ to cut interest rate again in August. The central bank delivered an updated assessment of the economy and noted that "at this stage it seems likely that further policy easing will be required to ensure that future average inflation settles near the middle of the target range."
Elsewhere, UK will release BBA mortgage approvals in European session. US will release S&P Case Shiller house price, consumer confidence and new home sales. The main focuses will remain on FOMC meeting on Wednesday and BoJ meeting on Friday.