BoJ likely to stand pat on Friday

Divergence is seen between Japan's data, soft and hard data in relation to inventories. This gap will remain intact, which reflects the adjustments to the perceptions about inventory levels since the earthquake in Great East Japan.

"The corporate inflation expectations could weaken again with the drop in oil prices, but we believe the BoJ will continue to emphasize the underlying inflation trend, which excludes energy prices. We expect policy to remain intact at the 17-18 December MPM".

Nevertheless, with the Q3 GDP revised to a positive figure, the latest capex signals looking to rise, and underlying inflation holding strong, the Bank of Japan standing pat this week is widely anticipated.