China PMI, Japan economic data and US jobs data to shape investor sentiment in Asia

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Asia's markets will be focusing on economic data from Japan, China and South Korea, while Friday's U.S. non-farm payroll data from March will be closely watched.

The U.S. payroll data, one of the gauges used to measure the health of the U.S. economy, has taken on fresh significance after recent remarks from Federal Reserve official have raised the prospects that the U.S. central bank may consider an interest rate hike in April, if readings on the economy remain solid.

Shane Oliver, head of investment strategy and chief economist at AMP Capital, said in a note last week he expects the U.S. economy is doing okay.

"Expect to see a solid 200,000 gain in March payrolls, with unemployment unchanged at 4.9 percent and wages growth picking up slightly," he said.

Another test for Abenomics

Japan will release a series of data for February this week. On Tuesday, it will release household spending, employment and retail sales, with industrial production numbers due Wednesday and the Bank of Japan's (BOJ) quarterly Tankan survey of business sentiment due Friday.

Those readings will offer another pulse check on how well the plan by Prime Minister Shinzo Abe to kickstart the country's long-moribund economy, dubbed Abenomics, is working.

Skepticism of Abenomics has grown in the wake of the BOJ's surprise decision to introduce negative interest rates in late January in an effort to spur inflation toward the central bank's 2 percent target. Consumer price inflation (CPI) data released last week showed prices were flat on-year in February.

China's economic re-balancing act

On Friday, China will release its official March manufacturing and services purchasing managers index (PMI). The Caixin manufacturing PMI, which focuses on small and medium-sized enterprises, is also due Friday.

Markets will be watching both for progress on the mainland's efforts to shift from a manufacturing-driven economy toward services and for indications of whether the country is on track to meet its economic growth target of 6.5-7 percent for this year, set at this month's National People's Congress (NPC) meeting.

February's reading of the twin gauges of factory activity showed a contraction in the manufacturing sector.

Capital Economics said in a note they expect improvement in the Caixin manufacturing PMI data for March as output for February "may have been disrupted by factory closures due to Chinese New Year holidays."

"Official PMI has been too stable over the past year to provide a useful gauge of economic momentum," they added, noting they still expect the numbers to pick up.

Other notable data to watch this week include South Korea's industrial production and retail sales numbers due Thursday and March trade data on Friday. In addition, the Bank of Thailand's economic forecasts are due Thursday and Hong Kong's February trade data are due Tuesday.

In corporate news, March 31 is the final deadline for Taiwanese manufacturer Hon Hai Precision Industry, also known as Foxconn, to close its takeover deal of troubled electronics manufacturer Sharp. The deal hit a snag in recent weeks, following Sharp's disclosure of potential liabilities, as reported by Reuters and the Nikkei newspaper.

On Saturday, Reuters reported, citing sources, that the two will sign a takeover deal this week with a smaller than originally planned bailout.

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