SINGAPORE, Dec 21 - Following is the view from
Reuters Asia editors on the news that is likely to matter most
this week: * JAPAN ECONOMY: Efforts to trim spending to meet bond
target * IPO TRAIL: China Pacific Insurance debut, Tiger Air
details * CHINA TRADE: Final set of Nov data; fuel, coal in focus * PAKISTAN POLITICS: Pressure mounts on President Zardari JAPAN ECONOMY After government acceptance that new bond issuance in
2010/11 can't exceed 44 trillion yen, the finance ministry is
trying to pull the coalition group into line to cut back on
spending plans. The story this week will be whether the finance
ministry is making progress or not in that quest or whether it
can fill the gap in other ways. Recalcitrant words from
coalitions partners will get bond markets worried and reinforce
some market suspicions that capping bond issuance next year at
44 trillion yen is unrealistic. They will also reinforce a view
that Prime Minister Hatoyama is unable to take and implement
tough decisions, a view that is eroding his government's
popularity in opinion polls. Still, 44 trillion yen is the line
that the government has drawn in the sand, aware that a ratings
downgrade hangs over its head if it is ultimately forced to
push borrowing even higher. The Democratic Party-led government
has already accepted it will have to pull back on some campaign
promises that led it to a historic landslide election victory
in August, when it kicked out an incumbent that had ruled
pretty much unbroken for the previous half a century. But it is
still deeply worried that the economy will slip back into a
recession, hence its pressure on the central bank to come up
with more aggressive policies to support the economy given its
own fiscal restraints. Will get updates on the economy through
the week with trade and Reuters Tankan on Monday and Tuesday,
and a data batch on Friday, the most important of which is
likely to be November's consumer price index. [nECONJP]
(neil.fullick@thomsonreuters.com)
(john.chalmers@thomsonreuters.com)
> Top economic events [M/DIARY]
> Five world markets themes this week [MKT/THEMES]
> Reuters polls and surveys [ID:nL10903477] IPO TRAIL China Pacific Insurance debuts its $3 billion Hong Kong IPO
on Dec. 23, the latest in a slew of Asian offerings, and the
world's 7th-largest this year. Although some recent offerings
have struggled, the China IPO pipeline looks robust into the
New Year. A draft prospectus expected from Tiger Airways on
Dec. 21 may provide updated stakes held by Singapore Airlines
(SIAL.SI) and Temasek [TEM.UL], plus which shareholder is
heading for the exit. The IPO has been halved to around $180
million and could still face obstacles given the negative
outlook for the airline industry. Indonesia's Garuda and Lion
Air also cited as IPO candidates for 2010.
(ian.geoghegan@thomsonreuters.com)
> Company news diary [GLO/EQUITY]
>MARKETS WEEKAHEAD-Debt fears sour holiday mood
[ID:nLDE5BH0HJ] CHINA TRADE China's final batch of November trade data is due on Dec.
22, and we have already calculated a 20 percent year-on-year
leap in oil demand and got a rough idea that base metals
imports rebounded slightly during the month. The main questions
now are the usual: how much diesel/gasoline did China export?
How much coal and coking coal did it import, especially in
light of slower steel production and onset of winter?
(Michael.Urquhart@thomsonreuters.com) PAKISTAN POLITICS Talk of a coup in Pakistan is without foundation, but
certainly the court decision ending the amnesty that protected
key politicians - including some cabinet members - from
corruption prosecution adds to political uncertainty and
further weakens President Zardari. Speculation about him
resigning, at least in the near term, looks off base. That
would end the immunity he now enjoys as president so his
incentives look minimal. This will play out in the courts,
which will take weeks, at the fastest. The danger for Zardari
is if the courts take up challenges to his eligibility to have
stood for president back in 2008. This might come to pass, but
again not for some time. Another danger for Zardari would be
if opposition leader Nawaz Sharif were to launch protests
against him, but there is no sign of that for now. Indeed,
Sharif has been going out of his way to avoid rocking the boat.
He's probably content to sit back and watch the pressure
mounting on Zardari through the courts. Sharif still wants
Zardari to transfer powers back to the prime minister, however,
and there is no doubt the court decision and uncertainties
about where the legal process will go mean political tension is
rising and this will consume the government's attention and
unnerve investors. [nAFPAK]
(john.chalmers@thomsonreuters.com)
> Five key Asia political risk themes to watch [nASIARISK]
> Weekahead Americas [WKAHEAD/AM] Europe [WKAHEAD/EM]
> Index of Reuters diaries [IND/DIARY]
(Editing by Mathew Veedon) fdg ((Mathew Veedon, +65 6870 3827;
mathew.veedon@thomsonreuters.com; Reuters Messaging:
mathew.veedon.reuters.com@reuters.net))

Pakistan