Quotes from Barclays Capital:
-Japan's inflation dynamics continue to demand close attention, in our view. We expect the January national core CPI (Friday) to decelerate further, to +2.3% y/y (consensus: +2.4% y/y) from +2.4% y/y in December. This translates into a deceleration to +0.3% from +0.4% on an ex-VAT basis.
-We forecast that core inflation will gradually decelerate toward zero by the middle of 2015, forcing the BoJ to decide on an additional easing at its July monetary policy meeting. Elsewhere, January real activity data will also be closely watched given the disappointment in Q4 GDP growth (+2.2% q/q saar, vs +3.7% expected).
-We expect January industrial production (Friday) to accelerate to +3.7% m/m (consensus: +3.0%), from +0.8% in December, while we forecast January real household consumption (Friday) at -4.0% y/y (consensus: -4.1%). While y/y growth will likely remain in a negative territory because of the effect of VAT, m/m growth is likely to stay positive for the fifth consecutive month, as we expect +0.9% m/m, vs +0.4% in November.