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Busy week awaits Asia ahead of CNY holiday

Asian markets have plenty to chew over in the week ahead, even as investor activity in China is expected to wind down ahead of the week-long Lunar New Year holiday, which kicks off on Thursday.

A scene of the Chinese New Year decorations in China.
Richard I'Anson | Collection | Lonely Planet Images
A scene of the Chinese New Year decorations in China.

Nippon health check

Japan takes the spotlight early Monday, with gross domestic product (GDP) showing the country emerging out of recession in the fourth quarter of 2014, although the growth figures came in much weaker than expected. Gross domestic product grew an annualized 2.2 percent, missing a Reuters poll expecting a 3.7 percent gain.

The second-largest economy in Asia will also release its January trade data on Friday, which will likely see exports chalking up a fifth straight month of growth, up 11.9 percent year-on-year. However, imports are expected to contract an annual 4.8 percent, leaving Japan with a trade deficit of 1,690 billion yen ($14 billion) for a record 31st month in a row.

Last month, exports grew 12.9 percent, the most in a year, on the back of a weak yen and rising overseas demand, while imports advanced a less-than-expected 1.9 percent.

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Central bank watch

After a string of surprise actions from central banks to loosen monetary policy in recent months, a handful of monetary policy meetings across Asia on Tuesday will attract more attention than usual.

South Korea and Indonesian central banks are expected to keep interest rates steady, taking on a "wait and see" approach. However, Moody's Analytics say policymakers in these two countries will hop on the easing bandwagon over the coming months to boost economic growth.

Tuesday also brings the minutes from the last central bank meeting in Australia, which will confirm that "the door is open to another interest rate cut, but are unlikely to say anything new given governor Glenn Steven's parliamentary testimony last Friday", noted Shane Oliver, head of investment strategy and chief economist at AMP Capital. The Reserve Bank of Australia chopped interest rates by a quarter-point last week to a historic low of 2.25 percent, spurring a 12-session winning streak in the benchmark S&P ASX 200 index.

Meanwhile, the Bank of Japan kicks off its two-day policy meeting on the same day.

Other data lined up for the week include China's house price index for the month of January, as well as Taiwan and Thailand's GDP data for the final quarter. In India, the wholesale price index (WPI) for January is expected to rise 0.4 percent year-on-year, a Reuters poll showed, a tick higher than the 0.1 percent in the preceding month.