What’s important in Asia this week

Nissan Plant, Japan
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Nissan Plant, Japan

Asia's financial markets have plenty to chew over this week in the form of economic releases from Japan and China, the region's two biggest economies, not to mention a central bank meeting in India.

Japan is expected to release June household spending, jobs and industrial production numbers early in the week, while Bank of Japan Governor Haruhiko Kuroda is scheduled to speak to business leaders later on Monday.

The data could be in focus after inflation numbers released on Friday, showed Japan's consumer price index turned positive last month – giving hope to the central bank's aim to boost inflation to 2 percent over two years.

(Read More: At last, inflation in Japan is speeding up)

Economists polled by Reuters forecast Japan's household spending rose 1 percent in June from a year earlier, compared with a 1.6 percent fall in May.

"In Japan, data for household spending, the labor market and industrial production will be watched for further evidence that Abenomics is working," said Shane Oliver, chief economist at AMP Capital in Sydney, in a note.

In China, the release of the official purchasing managers index (PMI) of manufacturing activity for July is due out on Thursday, the same day that HSBC is expected to release the final reading of its China PMI.

The flash reading of the HSBC PMI was published last week and fell to an 11-month low of 47.7 in July from 48.2 in June, holding below the 50-barrier that divides expansion in the sector from a contraction.

(Read More: China July flash HSBC PMI plunges to 11-month low)

"In China, the official manufacturing PMI for July on Thursday is likely to follow the HSBC PMI below the 50 level with a reading of 49.8 expected. Data for industrial profits will also be released," Oliver added.

Markets have been sensitive to Chinese economic data in the last few months amid signs that the world's second biggest economy has slowed more sharply than anticipated.

Other Asian economic data due out this week include Singapore second-quarter jobs data and Taiwan's second-quarter economic growth numbers.

Central banks are also likely to be very much in focus this week, with the U.S. Federal Reserve, Bank of England and Europe Central Bank holding monetary policy meetings.

The Fed's two-day meeting, which concludes on Wednesday, has the potential to have the biggest impact in Asia as investors try to assess the timing of when the central bank will start to unwind its monetary stimulus.

In addition to the Fed meeting, U.S. second-quarter economic growth numbers and the key non-farm payrolls report are also due out later in the week.

(Read more: Changes to Fed 'forward guidance' could bring volatility back)

"We have lots of event risk with U.S. GDP, the Fed meeting, jobs data coming up," Ilya Spivak, FXCM Currency Strategist said. "And as we look at the Fed, tapering is what will drive markets."

Back in Asia, a meeting of India's central bank on Tuesday is likely to be in focus given recent efforts to stem a sharp decline in the Indian rupee.

Most economists do not expect the Reserve Bank of India (RBI) to change interest rates.

"The RBI will stand pat, reiterating price stability objectives. Crucially, currency stabilization measures enacted via liquidity tools ought to be differentiated from overall monetary policy direction," analysts at Mizuho Corporate Bank said in a note.

—By CNBC's Dhara Ranasinghe; Follow her on Twitter @DharaCNBC