(MarketWatch) - China's economy and its relations with the US will likely be in focus in Asia during the coming week, as the markets begin to rev back up from the holiday season.
With investors across Asia awaiting policy-easing moves from Beijing, Chinese inflation numbers may prove key, as they will offer clues as to how much the central bank can loosen policy without risking a large run-up in prices.
Although the People's Bank of China has already made some "fine-tuning" adjustments to ease liquidity, the markets will also want to see a further cooling to consumer prices, freeing the central bank's hand further.
The consumer price index, along with its producer-price cousin, are slated for release Monday, with a China Securities Journal report Thursday citing analysts' forecast for a year-on-year rise of about four percent to 4.1 percent for the CPI.
If so, it would mark the latest step in a significant climbdown from the 6.5 percent consumer inflation clocked in July, and just below the 4.2 percent recorded in November.
A day after the inflation data, US Treasury Secretary Tim Geithner is due to arrive in Beijing and is slated to meet with Premier Wen Jiabao on Wednesday.
High on the agenda will be the simmering trade tensions between the world's top two economies, including China's perennial trade surplus with the US, as well as cooperation in dealing with Iran's nuclear program.
A Treasury statement released ahead of the trip said Geithner will "discuss measures to promote continued economic growth and level the playing field for US workers and firms."
Fittingly, China is scheduled to release its December trade data on the same day Geithner touches down.
The data may show a further narrowing for China's overall trade surplus, with a Xinhua report Thursday citing the commerce minister as saying the 2011 surplus may have shrunk to about $160 billion, down from 2010's $183.1 billion.
Meanwhile, Geithner's trip will include a meeting with Chinese Vice President Xi Jinping, who is widely expected to succeed current President Hu Jintao. Xi is due to visit Washington later in the year.
Geithner is also due to stop through Tokyo on Thursday to meet with leaders there.
And on Friday, the Bank of Korea is slated to hand down its latest monetary-policy decision. Given growth concerns facing the nation, many economists see an interest-rate cut coming.
That said, the Korean central bank said late last month that it would keep its "emphasis on firmly anchoring the basis for price stability," lowering the odds of a cut at the coming week's meeting.
The Bank of Korea's last rate move was a hike, back in June, putting the benchmark policy rate at 3.25 percent.
Read more: MarketWatch
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