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In Asia, the spotlight is on Japan this week

A deluge of data from Japan that could give a clearer indication on how the world's third largest economy is coping with a consumption tax hike implemented in April, will top traders' watch list this week. Earnings are also in the spotlight, with a slew of corporate earnings due in Sydney and Hong Kong, along with economic data from the United States.

Japan's inflation, household spending and employment for the month of July are due for release at 0730 SIN/HK before Tokyo's market open on Friday. Retail sales and industrial output for July are due at 0750 SIN/HK on the same day.

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Economists polled by Reuters forecast nationwide core consumer price index (CPI) rising 3.3 percent on-year, unchanged from June's reading. The core Tokyo CPI for July is seen advancing an annual 2.7 percent, a tick below the 2.8 percent in the previous month.

Household spending is expected to fall 3 percent from the year-ago period, the same as June's figure. On a month on month basis, it is expected to improve to 1.6 percent on-month in July from 1.5 percent in June. Retail sales are seen reversing from the contractions for the past two months, with Reuters economists polling a 0.1 percent annual rise in July.

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Moody's Analytics expects the data to alleviate fears of how much of a drag the consumption tax, which was raised to 8 percent from 5 percent in a bid reduce the country's hefty debt pile, will have on the economy.

"Household expenditure fell modestly in June but this was still a substantial improvement from the sharp contractions in April and May. Real incomes are still falling but sentiment has risen since April. We should see a steady upturn in consumer demand in the third quarter," analysts wrote in a report.

Tomohiro Ohsumi | Bloomberg | Getty Images

In India, first quarter gross domestic product (GDP) data on late Friday will be in focus.

"India's economy is on the mend and is expected to show acceleration in GDP growth in the June quarter," wrote Moody's Analytics. "Industrial production is growing at a solid pace; Exports and imports have also rebounded. Business investment could surprise on the upside."

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The Philippines is also on GDP-watch as the Southeast Asian country releases growth figures for the April-June period on Thursday. Thailand will announce its July trade figures on Wednesday.

Meanwhile, the earnings season continues in Asia. In Hong Kong, Fosun, PetroChina, Agricultural Bank of China and China CITIC Bank will be the firms to watch this week. Over in Australia, Whitehaven Coal, BC Iron, retailer Woolworths as well as airlines Qantas and Virgin Australia, are due to report.

"It will be the final week of the Australian June profit reporting season with 50 major companies due to report. The final week often sees a few rough results as laggards sometimes come last," wrote Shane Oliver, head of investment strategy at AMP, in a note.

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Beyond Asia, traders will be looking to the U.S. for reaffirmation that the world's largest economy is well on its recovery track. Data due includes durable goods and consumer confidence on Tuesday, pending home sales on Thursday and the core private consumption deflator on Friday.

"Expect a continued trend rise in durable goods orders and a slight fall in consumer confidence. Pending home sales should see a rise while a continued benign reading for the core private consumption deflator which is the Fed's preferred inflation measure," AMP's Oliver wrote.

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