Japan, emerging markets in focus for Asia

Asian investors will likely pay attention to key data releases from the world's third-largest economy and emerging markets this week.

Thursday and Friday will see the release of Japanese jobs, retail sales, household spending, consumer price inflation, and industrial output for April, alongside growth figures from the Philippines and India.

"Japanese data will show the initial impact from the recent sales tax hike. This is likely to show up as a fall in household spending and industrial production (both of which were boosted prior to the hike) and a spike in inflation to around 3 percent. Labor market data is unlikely to be much affected," said Shane Oliver, head of investment strategy and chief economist at AMP Capital.

Read MoreJapan's exports pick-up steam in April

Policymakers have been increasingly worried about a drop off in consumption following April's sales tax increase, but recent evidence shows the impact may not be as bad as anticipated.

Last week, a Reuters poll showed that 63 percent of companies surveyed expect sales to rise by year-end while 37 percent were willing to raise worker salaries compared with only 8 percent in November's survey.

Pedestrians cross a street in the Ginza district of Tokyo, Japan.
Akio Kon | Bloomberg | Getty Images
Pedestrians cross a street in the Ginza district of Tokyo, Japan.

After the Bank of Japan's policy meeting on May 21, governor Haruhiko Kuroda said the central bank would carefully assess the economic damage stemming from the sales tax.

Eye on emerging markets

Thailand will likely continue to draw attention following the army's takeover on Thursday, with focus on manufacturing companies given the country's reputation as a supply-chain hub.

Read MoreThailand's escalating crisis: In pictures

On Thursday, the Philippines is set to announce gross domestic product (GDP) for the first three months of the year. Senior government officials told Reuters in April that the economy likely grew around 7 percent in the first quarter from a year earlier.

In India, fourth-quarter GDP is due on Friday. Chetan Ahya, chief Asia economist at Morgan Stanley told CNBC last week that the country's growth would hit a four-year high of 6.5 percent in the next two years.

"Political developments in the emerging world are all over the place highlighting why investors need to be a lot more selective regarding emerging market assets this decade," AMP's Oliver continued.

Read MoreBusiness leaders pin hopes on a Modi-fied India

"At one end of the scale, the huge mandate delivered to the BJP (Bharatiya Janata Party) to reform the Indian economy augurs very well for the Indian economy and asset markets. At the other end, Thailand's latest coup highlights the mess Thailand has fallen into with civilian politicians unable to work things out," he added.

Asian traders will also focus on March quarter U.S. GDP growth, due Thursday. According to the Organization for Economic Cooperation and Development, GDP is expected to rise 3.9 percent on year.