In this Asian Focus Video Andrew Robinson, FX Analyst for Saxo Capital Markets in Singapore takes a look at recent Chinese data, previews the important Australian jobs report and comments on the latest Bank of Japan policy meeting

The implications so far from the release of China’s June inflation rate of 2.2 percent, the lowest rate since January 2010, immediately resulted in more talk of the flexibility of the People’s Bank of China to make further cuts to key rates, indicating that the market strongly believes China needs to lower them further to propel growth.

China’s trade data confirmed the Asian powerhouse is struggling. Exports did grow more than expected but most of the gain in the trade surplus was due to a slowdown in imports. Of particular interest was a slowdown in steel and iron ore imports, which is bad news for the Australian economy, as it further underlines the shaky ground AUD is on, says Andrew.

Industrial production and retail sales data for China due Friday are not seen drawing much attention or resulting in much market reaction with only minimal increase expected. What will be watched closely however is Q2 GDP, also out Friday. Consensus expects some slowdown to 1.6 percent qoq down from 1.8 percent in the first quarter and on annual basis 7.7 percent down from 8.1 percent. With the situation outside China slowing dramatically there’s a good risk however that the numbers will surprise to the downside, says Andrew.

Elsewhere in Asia a Q2 GDP report from Singapore, also out Friday, is seen reflecting similar downbeat expectations - 1.2 percent qoq, which is a marked deterioration from the 10 percent seen in the first quarter.

Looking further south in the Asian region, an Australian employment report for June will also be closely watched with the past two releases having been quite robust. All factors are in place for another positive jobs report from Australia, says Andrew. Consumer confidence was quite buoyant into June suggesting employment is still quite easy to come by. Today’s release of Westpac consumer sentiment which showed a plus 3.7 percent reading, further confirmed the positive backdrop. While the market seems to be expecting a flat number of just below 39,000 jobs added last month, Andrew is more optimistic.

In terms of the Bank of Japan’s policy meeting this week the majority of analysts do not expect additional easing measures and Andrew is in that camp too. The BOJ’s inflation forecast is key with a medium-term target of 1 percent in the coming years, which according to data so far seems a tough order to achieve, says Andrew. If the BOJ further lowers its inflation forecast that will be seen as a positive for the yen as it means the BOJ is not expecting to achieve its target and will struggle to get policies in place to make it happen. The BOJ’s 2013 forecast previously was 1.7% so any kind of fluctuation from these kinds of levels will create volatility for USDJPY, says Andrew.

See more of Andrew's Asian market commentary on TradingFloor.com