Last week mixed results were released amid an unexpected drop in Japan’s core machinery orders, with a 7.1% drop in December indicating the stagnating effect of the strong yen and the global slowdown. However consumer sentiment unexpectedly increased to 40 from 38.9 while expected to reach 38.6. Will Japan be able to hold off a deeper decline?

World Economic Forum (WEF) Annual Meetings – Day 2, this time is held in Davos for Bankers, Political, trade & finance Ministers and Commercial leaders from around 90 countries. Can influent market volatility.

Last week Japan’s core machinery orders jumped 14.8% from October. This climb was much higher than predicted, suggesting companies spent more capital yielding to the market demand following last year’s earthquake. Meantime, Tertiary Industry Activity went down more than predicted dropping 0.8% in November after 0.7% gain in the prior month. Let’s find out what’s in store for us this week.

Last week Japan’s central bank released its monetary policy statement announcing the continuation of the current easy monetary policy in light of the growing concerns over European debt problems and the strong yen. The BOJ decided to leave its key interest rate near zero and continue to provide liquidity to the markets through government bonds. Will the Japanese economy improve in 2012?

In the US, Building Permits the annualized amount of residential permits released in October was well beyond predictions reaching 650,000 after 590,000 in the prior month. A small drop to 630,000 is expected now.

Australia’s GDP rose 1 percent in the third quarter, which was higher than the markets had anticipated. The areas of strongest growth were consumer spending and investment in the mining sector. With the cheery economic news, a third consecutive interest rate cut in February by the central bank appears less likely. The US rallied against the Aussie last week, as the greenback continues to benefit from the crippling eurozone debt crisis.

In the US, Existing Home Sales, monthly indicator to value the sold uptown houses over the last month (without new building), reduced is forecasted from 4.91M on October down to 4.82M now.

Last week preliminary GDP grew by 1.5%, in line with predictions, after three quarters of decline. The major improvement was thanks to the rapid mending of production capacity after the Great East Japan Earthquake. The Overnight call rate and monetary policy statement were also announces last week but no major changes were made by  the BOJ members. Let’s see what this week will bring.

In the US, Producer Price Index (PPI), important consumer inflation sign that value the producer’s goods and services prices, about to reduce from 0.8% on October down to -0.1%, and the Core PPI (not including energy and food) is due to decrease from  0.2% down to 0.1%.

Employment figures came out within expectations, with a gain of 10K jobs and a small drop in the unemployment rate. Other indicators were also OK, but not good enough to boost the Aussie.