A flurry of data releases will provide a snapshot of economic health in Asia Pacific, as anticipation builds over the U.S. Federal Reserve's next move.
Measuring China's economic health
Manufacturing surveys in China will be of particular interest, as investors measure the country's success in transitioning manufacturing-oriented to a services economy.
May factory activity data - which look at large enterprises only, and are due Wednesday - will be a key indicator of progress. In April, activity in China's manufacturing sector expanded marginally while the services sector remained strong, according to official data. The manufacturing purchasing managers index (PMI) rose to 50.1, easing from March's 50.2, while the services PMI was at 53.5. A reading above 50 suggests expansion in activity.
A Reuters poll showed market watchers expect the manufacturing PMI reading to come in at 50.0.
"The message out of China is likely to remain one of continued growth around the 6.5 to 7 percent level. No bust but not growth acceleration either," said Shane Oliver, head of investment strategy and chief economist at AMP Capital, in a Friday note.
Growth Down Under
With the federal elections a little more than a month away, a number of important indicators due this week may shed light on how effective the government has been in curbing the economy's dependence on commodity exports . The first quarter 2016 gross domestic product (GDP) numbers are due on Wednesday, followed by April trade numbers and retail sales on Thursday.
Moody's Analytics expects GDP growth for first quarter 2016 to be at 0.7 percent over the quarter.
"Domestic demand remains upbeat on account of accommodative monetary policy and a buoyant housing market," Moody's said. "However, the lack of full-time employment growth likely moderated the gains."
Another test for Abenomics
Japanese data due this week include April retail sales on Monday, jobs report, household expenditure and industrial production on Tuesday and May consumer confidence due Thursday.
The numbers would give further indication on the effectiveness of Prime Minister Shinzo Abe's economic policies, after Friday's inflation data showed consumer prices in April fell, putting additional pressure on the Bank of Japan (BOJ) ahead of its June meeting.
At the G7 summit in Japan last week, Abe claimed that a crisis similar to one accompanying the collapse of Lehman Brothers loomed, which many skeptics dismissed as an excuse to delay a consumption tax hike in the country.
Izumi Devalier, Japan economist at HSBC, told CNBC's "Street Signs" on Friday the delay will likely be announced early this week. She added it's a close call for a June or a July stimulus package from the Japanese central bank, after the BOJ surprised markets by standing pat in April.
"In terms of data, the conditions for additional easing are set. But there's some interplay between the tax delay announcement, supplementary budget and the July upper house election. So it's a close call," she said.