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What's important in Asia this week

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HSBC's flash estimate of the China purchasing managers' index (PMI) is likely to feature high on the list of data to be watched closely in Asia this week.

The week ahead also sees the latest inflation releases from Japan, Australia, Hong Kong and Singapore, while any comments from Japanese Prime Minister Shinzo Abe following Sunday's election win for his ruling coalition to the upper house of parliament could also be in focus.

(Read More: What Sunday's Japan election means for Abenomics)

The HSBC PMI is due out on Wednesday and should provide the first clues of how the manufacturing sector is holding up this month.

The HSBC June PMI fell to a nine-month low of 48.2 from 49.2 in May, slipping further below the 50-mark that divides expanding activity in the sector from a contraction.

Data on China's economy is much in focus for global markets as investors try to assess the extent of a slowdown.

"We would be surprised if the flash HSBC PMI wasn't weak and it does come after the credit crunch in June," Richard Yetsenga, head of global market research at ANZ, told CNBC Asia's "Squawk Box" on Monday.

A credit squeeze for local lenders last month has raised concerns that tight liquidity conditions will spill over to the broader economy and undermine growth.

(Read More: China is right to tame credit growth: Moody's)

China releases its latest industrial profit numbers at the weekend.

Inflation watch

Hong Kong releases June inflation data Monday, followed by Singapore on Tuesday. Australia posts its second quarter consumer price index (CPI) on Wednesday and Japan publishes its latest CPI data on Friday.

"In Australia, June quarter inflation data to be released Wednesday are expected to show that inflation remains benign, likely setting the scene for another cut by the Reserve Bank of Australia when it meets in early August," Shane Oliver, head of investment strategy and chief economist at AMP Capital, said in a note.

(Read More: Australia central bank on hold, says currency to fall more)

Any signs that Japan is moving out of deflation could cheer local markets and give further ammunition to Shinzo Abe and his radical plans to transform Japan's economy.

Abe is scheduled to visit Malaysia, Singapore and the Philippines later this week.

Investors will be watching for potential comments from Abe on his long-term plans for Japan's economy amid some concern that his strong election win at the weekend could reduce the incentive to initiate structural reforms.

(Read More: Fate of yen hinges on Japan's weekend elections)

Central banks in New Zealand and the Philippines are scheduled to meet this Thursday, while South Korea releases its second-quarter economic growth numbers the same day.

Analysts at Bank of America Merrill Lynch expect the Philippine central bank to leave its key rate unchanged at 3.50 percent

"We expect Korea's GDP growth to improve to 1.9 percent year-on-year in Q2 from 1.5 percent in Q1 on strong construction investment and favorable base effects," they added in a research note.

— By CNBC.Com's Dhara Ranasinghe, Follow her on Twiiter: @DharaCNBC

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