Economy

Could this be the busiest week yet for Asia markets?

The Federal Reserve
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The year is rapidly drawing to a close but this is unlikely to be the week that Asia markets wind down – not with the Federal Reserve, Bank of Japan (BOJ) and Reserve Bank of India (RBI) all scheduled to meet.

In addition to major central bank meetings, Japan released its closely-watched Tankan business survey on Monday and HSBC released its flash purchasing managers' index (PMI). The HSBC flash PMI slipped to a three-month low in December of 50.5.

(Read more: Business sentiment in Japan hits a 6-year high)

"This week could be one of the busiest, most market changing weeks of the year... and possibly the biggest FOMC [Federal Open Market Committee] meeting since the September 2012 when QE3 (third round of quantitative easing) was enacted," said Evan Lucas, market strategist at trading firm IG, in a note.

The Fed concludes a two-day meeting on Wednesday amid heightened talk that it could use its final gathering of the year to start a widely-anticipated scaling back of its monetary stimulus program.

Taper is a 'long overdue dance party': Pro
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Taper is a 'long overdue dance party': Pro

"I think they [Fed policymakers] are going to taper and I hope they will start to taper this week," Richard Yetsenga, head of global markets research at ANZ, told CNBC Asia's "Squawk Box." "If the numbers stay healthy enough to suggest the economy is stabilizing, people will turn their minds to when the Fed will tighten interest rates."

In Asia, the BOJ is expected to conclude a two-day meeting on Friday and the RBI holds a mid-quarter review on Wednesday.

(Read more: Westpac's contrarian view calls no taper in 2014)

Analysts are not expecting any major policy announcements from the BOJ, although there is speculation that Japan's central bank could step up its asset-purchase program, possibly in April to help offset the impact of a scheduled rise in the country's sales tax on the economy.

In India, the RBI meeting is likely to be in focus after Governor Raghuram Rajan said last week the central bank would this week unveil steps to recognize financial distress and resolve it.

Indian markets awaiting RBI decision: Pro
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Indian markets awaiting RBI decision: Pro

"The RBI will likely pause at its meeting on Wednesday after a cumulative 50 basis points [rate] hike since September," analysts at Mizuho Corporate Bank said in a note.

"What's more, with the RBI meeting scheduled ahead of the FOMC meeting, we think the central bank will likely wait for Fed's decision before taking any action," they added.

(Read more: India market euphoria could end in disappointment)

Economic data from Asia this week include India's November wholesale price index later on Monday and Singapore export data on Tuesday.

Taiwan's central bank is scheduled to meet on Wednesday, while in Australia, focus is likely to fall on the government's mid-year budget review on Tuesday.

"The mid-year budget review on Tuesday will likely show a further blowout in the budget deficit for this financial year to around A$50 billion," said Shane Oliver, head of investment strategy and chief economist at AMP Capital, in a research note.

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