What’s Important in Asia This Week

Federal Reserve Board Chairman Ben Bernanke
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Federal Reserve Board Chairman Ben Bernanke

The main driving force for Asian markets in the week ahead is expected to come from the U.S., where the Federal Reserve will hold a two-day policy meeting.

The Fed concludes its meeting on Wednesday and is in firm focus as investors around the world try to assess when the central bank will start to unwind some of the monetary stimulus that have given risk assets a powerful boost in recent years.

(Read More: Heeer's Bernanke: Will the Fed Finally Get Specific?)

Asian markets have shared their brunt of the Fed tapering jitters, with stock markets and currencies such as the Indonesian rupiah taking a beating last week.

"I think the message we are getting is that the Fed would like to keep markets focused on the idea of tapering but also give them a bit of a sedative to say we are starting to unease but we're not tightening," Richard Yetsenga, head of global markets research, at ANZ in Sydney told CNBC Asia's "Squawk Box."

"We have seen much higher volatility and markets will like the Fed signaling a let's be calm and let's take this one step at a time approach," he added.

The Fed is likely to act soon to quell the jitters in markets about the potential scaling back of its bond-buying plan, noted Fed watcher Jon Hilsenrath wrote in the Wall Street Journal last week.

(Read More: Why the Fed Will Try to Calm Market Nerves)

And once the Fed's meeting is out of the way, attention could turn to Chinese economic data as concerns mount about the outlook for the Asian power house.

The HSBC China purchasing managers index for the manufacturing sector is released on Thursday, with analysts polled by Reuters expecting the index to fall deeper into contraction territory at 49.2 in May compared with 49.6 in June.

"There are some things going on in China we need to be cognizant of. There are is some tightening in credit markets. Growth is drifting lower rather than stabilizing, so we should be careful about the news flow from China," said Yetsenga.

In Australia, the Reserve Bank of Australia on Tuesday releases the minutes from its meeting earlier this month and that could give local markets some steer about the prospects for further monetary easing.

The central bank held rates steady at its meeting earlier this month after cutting them in May. Most economists expect further easing amid concerns that 200 basis points worth of rate cuts since late 2011 are failing to have a significant impact on the economy.

"In Australia, the minutes from the RBA's last rate setting meeting are expected to confirm that it retains an easing bias and will be watched closely to see how concerned the RBA is about increasing evidence that mining investment has peaked at a time when the rest of the economy is still subdued," Shane OIiver, chief economist at AMP Capital in Sydney said in a note.

(Read More: Dreaded R Word Catching Up With Australia)

Elsewhere in the region, Japan releases May trade data on Wednesday and Bank of Japan Governor Haruhiko Kuroda is scheduled to give a speech on Friday.

The BOJ has been criticized in recent weeks for not doing enough to calm volatile government bond markets, so Kuroda's comments could be watched closely.

By CNBC.Com's Dhara Ranasinghe, Follow her on Twitter: @DharaCNBC