China, Japan data deluge on tap this week

A raft of data releases from Asia's two largest economies will be the key events for markets in what is expected to be a quiet, holiday-shortened week.

Markets in China, South Korea and Taiwan will be shut until Thursday for the Mid-Autumn Festival while Hong Kong will be closed on Tuesday.

Focus will also fall on an annual meeting of global business leaders in Tianjin, China. The Eighth Annual Meeting of the New Champions, commonly known as the Summer Davos forum, will kick off Wednesday under the theme of "Creating Value Through Innovation."

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China trade eyed

China's August trade report on Monday is expected to show continued weakness in the world's second-largest economy,

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"The Chinese trade surplus is expected to narrow to $40.6 billion in August from $47.3 billion in July, due to a combination of both slower export growth and faster import growth," warned National Australia Bank economists in a report.

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According to a Reuters poll, exports likely increased 8 percent from a year ago, slower than July's 14.5 percent jump, while imports rose 1.7 percent after falling 1.6 percent previously.

Meanwhile, inflation data on Wednesday is expected to be tame. Annual consumer price inflation (CPI) could inch down to 2.2 percent from 2.3 percent in July, according to Reuters, well below the government's annual target of 3.5 percent.

More weakness in Japan?

The world's third largest economy released revised second-quarter gross domestic product (GDP) before Monday's market open. The economy contracted an annualized 7.1 percent in the April-June quarter, worse than initial estimates of a 6.8 percent contraction.

Meanwhile, the country's current account returned to a surplus in July after posting a deficit for the first time in five months in June. The surplus stood at $3.96 billion, compared to June's $3.9 billion shortfall.

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Next up is July machinery orders, which are expected to slow after jumping 8.8 percent on month in June. Moody's Analytics tips a 3 percent rise, but warns that the underlying trend remains week.

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"The April tax increase has distorted a lot of the data, but it seems that the capital expenditure cycle has started to slow, and we don't expect business investment to add much to the economy in the near term. Corporate profits have risen, but firms are not yet willing to deploy their ample reserves to lift productive capacity," said analysts in a report on Friday.

Elsewhere in the region

Australia's August jobs report on Wednesday will also be in focus.

"For August, we expect to see a solid 25,000 increase in employment after the small 300 person decline in July, which should help to reduce the unemployment rate to 6.3 percent if the participation rate remains unchanged at 64.8 percent," said economists at National Australia Bank.

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Monetary policy decisions in New Zealand, South Korea, Indonesia and the Philippines are all due this week but only the latter is expected to take action by hiking its overnight borrowing rate by 25 basis-points.