Australian economic data and reports of Chinese factory activity will likely influence the mood in Asian markets this week as traders position themselves for July.
The week kicked off with Japanese industrial production for May on Monday, released just before Tokyo's 8am market open. Output rose 0.5 percent on month in May, below expectations in a Reuters poll for a 0.9 percent rise but up from April's 2.5 percent decline.
"The 0.5 percent gain is better than our expectations. I think the Japanese economy is getting out of its economic contraction after the sales tax hike in April. I think it is quite fair to say that business activity will gain momentum from the second half of this year," said Junko Nishioka, chief Japan economist, RBS Securities Japan.
The Reserve Bank of Australia (RBA) is widely expected to leave interest rates on hold at its monetary policy meeting on Tuesday, as indicated in previous meetings.
Recent data such as the March quarter gross domestic product (GDP), which came in at a two-year high, and low consumer confidence give the RBA little reason to move on rates, Shane Oliver, head of investment strategy and chief economist at AMP Capital, said in a note.