ASIA MARKETS: Japan's Tankan On Tap For Asia This Week

By Michael Kitchen, MarketWatch

LOS ANGELES (MarketWatch) -- Data from Japan and China will likely take center stage in Asia for the second week in a row, as investors look for further clues to health of the region's top two economies.

On Thursday, the Bank of Japan is due to release its quarterly "tankan" survey, a closely-scrutinized measure of sentiment and expectations among the nation's businesses.

The Japanese economy has suffered a succession of blows over the past year, including a catastrophic earthquake and ensuing nuclear disaster, a persistently strong Japanese yen weighing on exporters and recent flooding in Thailand that hurt output at Japanese plants there.

This has come in addition to the European and U.S. debt crises that have plagued the global economy.

Consequently, the tankan results for the previous quarter are likely to be gloomy, and results this past week of a quarterly survey by Reuters -- sometimes known as the "Reuters tankan" -- showed manufacturers turning pessimistic for the first time in six months.

Over in China, HSBC is due to release preliminary results of its monthly manufacturing survey on Thursday, and again, the picture will likely be one of contraction.

HSBC's last Purchasing Managers' Index showed Chinese manufacturing contracted in November, with the headline reading at its weakest level since March 2009.

Markets will be watching to see if initial results for the current month will show the key sector shrinking further, particularly after official government data for November, released this past Friday, came in mostly weaker than expected.

Meanwhile, India will also be in focus, as the nation's central bank meets for a rate decision on Friday.

At its last meeting in late October, the Reserve Bank of India hiked its policy interest rates by a quarter point each in an effort to contain inflation.

However, it also signalled a pause for the December decision, literally say "the likelihood of a rate action in the December mid-quarter review is relatively low."

On the corporate front, Wednesday marks the deadline for Japanese blue chip Olympus Corp. (OCPNF) to report its most recent quarterly earnings or face delisting from the Tokyo exchange.

The company has been hit by an accounting scandal involving a cover-up of past losses and has had to revise much of its previous financial statements.

Still, Olympus has promised as recently as this past week that it will file by the Dec. 14 date.