Asia on Japan, China data watch this week

China is the 'macro risk' this week: Economist

A preliminary reading of Chinese factory activity and Japanese economic data are expected to set the tone of trading in Asia this week.

U.S. President Barack Obama's visit to Asia will also be in the background as he stops by Japan, South Korea, Malaysia and the Philippines with a key focus on advancing the Trans-Pacific Partnership (TPP) deal, experts say.

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China's HSBC flash purchasing manager's index (PMI) for April will be the region's key event risk. Due on Wednesday, "it is expected to strengthen to 48.5 from 48, but still remain in contraction territory below 50," said IG market analyst Chris Beauchamp in a note.

The investment bank's final reading for the China PMI of 48 for March marked its lowest reading in eight months and painted a contrary picture to the government's figure for the same period. According to the National Bureau of Statistics, the PMI rose to 50.3, a touch higher than February's 50.2 reading.

The data will follow last week's better-than-expected gross domestic product, which showed the economy grew 7.4 percent in the first three months of the year.

"From a macro point of view, it's all about China. That's obviously the biggest macro risk," Richard Jerram, chief economist at the Bank of Singapore, told CNBC on Monday.

"The HSBC PMI has really high value at the moment because it's a very reliable statistic in a world where a lot of the Chinese data is dubious to say the least. I think we put a lot of emphasis on the PMIs," he added.

Read MoreChina GDP puts to rest worst fears over the economy

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Monday saw the release of Japan's March trade data, which showed exports rose just 1.8 percent on year, well below estimates for a 6.3 percent annual rise. Meanwhile, imports increased an annual 18.1 percent, above analyst forecasts. Analysts said the rise in imports was a sign that consumers ramped up spending ahead of April's sales tax rise.

On Friday, Japanese nation-wide consumer price inflation (CPI) for March will be released, alongside the forward-looking Tokyo core index. Analysts say March's figure could show a tenth straight month of price rises ahead of April's sales tax hike.

"The data will likely show a further slight increase for March, with Tokyo inflation data for April expected to rise sharply on the back of the April 1 sales tax hike," said Shane Oliver, head of investment strategy and chief economist at AMP Capital.

Read MoreWill Japan's tax hike hobble the rest of Asia?

Elsewhere, central bank decisions in Thailand and New Zealand are expected on Wednesday and Thursday, respectively.

The Thai central bank, which cut interest rates to 2 percent in March, is expected to keep policy loose to support growth while many see the Reserve Bank of New Zealand (RBNZ) increasing its official cash rate by a quarter-point.

Australian markets will see a shortened trading week with markets shut on Monday and Friday for public holidays.