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GDP and BOJ: All eyes on Japan this week

Pedestrians walk past a sign with Japanese characters that reads 'What to buy? What to eat? What to see?' in the Shimokitazawa district of Tokyo.
Noriko Hayashi | Bloomberg via Getty Images
Pedestrians walk past a sign with Japanese characters that reads 'What to buy? What to eat? What to see?' in the Shimokitazawa district of Tokyo.

A flurry of economic data, alongside a central bank decision in Japan, will likely hog the spotlight in Asia this week.

Japan: GDP and BOJ

Japan will release its first-quarter gross domestic product (GDP) on Wednesday, which is expected to show the world's third largest economy on a steady recovery from recession after last year's sales tax hike.

The economy likely grew 1.5 percent over the January-March period, according to a Reuters poll of 22 economists, matching the rate of growth in the preceding quarter. That would translate into a quarterly growth of 0.4 percent, same as the October-December quarter, as exports and business investments improve.

"The economy is growing steadily on the back of exports and industrial production, which are benefiting from the cheaper yen and increased demand for new tech gadgets. However, private consumption stagnated due to a lack of wage growth and inflation erodes households' purchasing power. The swing variable will be investment, though on balance, it looks weak," a note from Moody's Analytics said.

March machinery orders released Monday rose 2.9 percent on year, rebounding from a 0.4 percent slip in February, and better than the 1.8 percent forecast by a Reuters poll.

Meanwhile, the Bank of Japan (BOJ) is expected to maintain its expansionary monetary stance at the conclusion of its two-day meeting on Friday. The BOJ kept policy steady last month, but cut its forecasts for economic growth and inflation in its outlook statement.

In a seminar last Friday, Governor Haruhiko Kuroda maintained his upbeat view on inflation and said he did not see any immediate need for further monetary easing. However, not all analysts agree with the governor's confident outlook.

"We will see more stimulus from the BOJ. Without meaning to insult Mr. Kuroda, his public speeches are usually much more upbeat than what the BOJ usually ends up doing," Michael Every, head of financial markets research for Asia-Pacific at Rabobank, told CNBC.

Read MoreIs Japan about to lose its cool?

Rest of Asia

China released its April house price index on Monday which showed prices falling 6.1 percent from the year-ago period, unchanged from March.

Also due on Monday, is Thailand's first quarter GDP figures. The economy is likely to have 3.3 percent on-year, according to economists from Bank of America Merrill Lynch, up from 2.6 percent in the previous quarter. However, on a quarter-on-quarter basis, GDP may contract 0.6 percent as exports and domestic consumption remained weak, while falling commodity prices exacerbated those woes.

Meanwhile, Bank Indonesia (BI) is expected to keep interest rates steady when it meets on Tuesday, amid accelerating inflation and volatility in financial markets.

The central bank is more likely to ease monetary policy in the third quarter, after the Federal Reserve offers more clarity on when interest rate hikes may occur and as negative seasonal factors on the current account subside, ANZ analysts wrote in a report. From July to September, Indonesia usually sees a widening in current account deficit due to the holy fasting month of Ramadan and Idul Fitri celebrations as Indonesians splurge on food and other consumer products.

Also on this week's calendar are Hong Kong's April consumer prices and revised first-quarter GDP from Taiwan.