Japanese numbers are particularly in focus this week in Asia after the Japanese Government revised down its assessment of Japan’s economy earlier this week due largely to the global economic slowdown’s effects on the country’s exports and industrial production. In this Asian Focus Video, Yvette Roper of TradingFloor.com interviews Andrew Robinson, Market Analyst for Saxo Capital Markets in Singapore, about important data from Japan. He gives his insight into the state of the economy in Japan and outlook for its currency.

The slew of data releases this week out of Japan includes retail sales, PMI manufacturing, unemployment, inflation and industrial production. None however are really seen impacting USDJPY though unless there are major deviations from expectations. Most focus is on Jackson Hole and what Federal Reserve Chairman Ben Bernanke will say, says Andrew.

Dollar-yen is seen staying where it is up to the release of data (has been in 40 point range for about a week), which doesn’t normally have a big impact on this exchange rate, says Andrew. The USDJPY cross is mostly sensitive to US interest rate differentials and any Japanese data impacts take a lot longer to trickle through to the exchange rate, he says.

“If there’s disappointment over Jackson Hole and no mention of more quantitative easing then we might see yields backing up again,” says Andrew. “For dollar-yen this would mean regaining the 79 mark but overall I can’t see enough momentum to get past the 80 big figure. For next week the range is 77-80 and narrowing it down further I see 77.5 to 79.5.”.

Retail sales data for July, due Thursday, is seen showing the first decline in data in eight months as Japanese consumers continue to tighten their purse strings as a result of global and domestic economic concerns. Large retailers are particularly seen suffering. Meanwhile, PMI Manufacturing data is also expected to confirm that Japan’s export markets are struggling and forcing its manufacturing sector onto its knees.

Friday is the big day though with PMI data the main focus as it preludes many of the global PMI releases at the beginning of next month. The indicator is expected to be a weak number again this time. Concerning inflation, or rather deflation which Japan has been struggling with for 15 years, the number this time is also expected to be negative at -0-3 percent yoy and when stripped of food and energy prices the decline will be even greater, probably around -0.6 percent.

This means the pressure on the Bank of Japan to introduce more easing measures is increasing. “It seems far away from its 1 percent inflation target, even though the bank stresses it’s a medium to long-term target,” says Andrew. “The next Bank of Japan meeting on September 19 is way off, so it will be a long and nervous wait.”

See more of Andrew's Asian market commentary on TradingFloor.com