What's important in Asia this week

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For Asian markets this week, the direction of the Chinese economy and the Federal Reserve's monetary policy are likely to remain the key focal points.

On Monday, data showed the world's second biggest economy grew an annual 7.5 percent in the second quarter of the year from the first, compared with a rise of 7.7 percent in the first quarter.

The data was in line with expectations and comes amid worries about the outlook for China's economy given recent weaker-than-expected economic numbers.

"The impact of weakness in exports and manufacturing has been cushioned by continued respectable growth in consumption and domestically oriented services," said Louis Kuijs, China economist at Royal Bank of Scotland. "Indeed,overall domestic demand growth has held up quite well through the second quarter."

(Read More: China's economy slows for second straight quarter)

Fed Chairman Ben Bernanke meanwhile testifies on the economy before a House panel on Wednesday and a Senate committee on Thursday.

His comments are likely to be watched closely by traders inside and outside Asia, keen for further clues on the likely timing for an unwinding of the U.S. central bank's $85 billion-a-month bond buying program.

Last week, Bernanke cheered markets by saying the U.S. economy continues to need a highly accommodative monetary policy.

"We think Bernanke will reinforce the notion of interest rates remaining low long after the QE [quantitative easing] tap is turned off. In other words, a much higher bar for considering rate hikes," analysts at Mizuho Corporate Bank wrote in a note.

(Read More: Market Tensions could run high with Bernanke, earnings in week ahead)

Back in Asia, India releases it key inflation gauge, the wholesale price index (WPI) later on Monday.

Analysts at Morgan Stanley expect the June WPI to come in between a range of 4.9-5.1 percent from a year earlier. The WPI rose 4.7 percent rise in May.

"We expect inflation to edge up in June to between 4.9 and 5.1 percent year-on-year on account of a sequential increase in food (vegetable) prices as crops were impacted due to excess monsoon rain and some pass through of rupee depreciation," they said in a note.

The Indian rupee hit a record low of around 61.21 per dollar earlier this month as expectations for an unwinding of Fed stimulus boosted the U.S. dollar sharply higher against both major and emerging market currencies.

Elsewhere in Asia, Hong Kong releases its unemployment rate for June on Thursday, while on Wednesday Malaysia releases its latest inflation data and Singapore publishes its non-oil domestic export numbers for June.

(Read More: Singapore Growth Soars 15.2% in Second Quarter)

The Singapore export numbers could attract some attention for local markets looking for further signs of a recovery in the city-state, which posted stronger-than-expected economic growth numbers for the second quarter on Friday.

—By CNBC.Com's Dhara Ranasinghe; follow her on Twitter @DharaCNBC