May 27 (Reuters) - A look at the day ahead in Asian

markets.

Trading volume and activity across Asia on Monday will be

among the lightest this year owing to the U.S. and UK public

holidays, but markets are open and there is no shortage of

issues for investors to chew on.

The economic calendar sees the release of Chinese industrial

profits figures for April and trade data from Hong Kong, while

South Korea hosts a trilateral meeting in Seoul with China and

Japan.

With the world's two biggest FX trading centers London and New

York both closed, yen traders may be on intervention alert.

Japan's last two suspected bouts of yen-buying action recently

came in extremely illiquid hours of the global day, one of which

was May 1 when many countries' markets were shut.

The dollar is back up at 157.00 yen, and the latest

Commodity Futures Trading Commission figures show that after

three weeks of reducing short yen positions, speculators are now

loading up on them again.

Could Tokyo be tempted to catch the market off guard again?

While trading volume will be thin in Asia on Monday, the

global investment backdrop remains constructive. Although bond

yields are rising and central banks' are leaning increasingly

hawkish, markets remain buoyant.

In large part, this is being led by U.S. developments -

strong earnings, solid growth and extremely subdued volatility.

Indeed, a key driver of the bullish momentum globally is the low

level of volatility.

The Chinese investment picture, of course, is less rosy, and

perhaps not coincidentally, China-Taiwan tensions are rising.

Downward pressure on the yuan's exchange rate appears to be

building again. The spot yuan just had its biggest weekly fall

against the dollar since mid-March, and the central bank's daily

dollar/yuan fixing rate on Friday was above 7.1100 for the first

time since January.

Foreign direct investment into China in January-April

plunged nearly 28% from the same period last year, and Goldman

Sachs analysts estimate that FX outflows in April accelerated to

$86 billion from a $39 billion outflow in March.

While many benchmark equity indexes around the world have

shot to new highs recently, and Hong Kong's Hang Seng rebounded

as much as 20%, Chinese stocks have found the going much

tougher.

And China's economic surprises index has continued to inch

lower in recent weeks too - on Friday it slipped to its lowest

level since February 8.

All that comes despite Beijing taking fresh steps to address the

property sector crisis. The week ahead is a quiet one in terms

of Chinese economic indicators, but April industrial profits on

Monday is a big one for investors.

Profits fell in March, complementing a slew of economic

indicators for the month such as retail sales and industrial

output that pointed to frail domestic demand.

Here are key developments that could provide more direction

to markets on Monday:

- South Korea, Japan, China trilateral meeting

- China industrial profits (April)

- Hong Kong trade (April)