May 17 (Reuters) - A look at the day ahead in Asian

markets.

Asian markets go into Friday's session looking to end a strong

week on a positive note, and there appears to be no obvious

reason why the recent upswing should reverse unless investors

opt for a bout of profit taking ahead of the weekend.

China's monthly 'data dump', when Beijing simultaneously

lands several top-tier economic indicators, could go a long way

to setting the market tone across Asia on Friday.

The MSCI Asia ex-Japan stock index is eyeing a sixth

consecutive rise, which would mark its best run since January

last year. Barring a slide of almost 3%, the index will close

the week in positive territory for a fourth week.

Wall Street ended a touch lower on Thursday, but not before the

Dow Jones Industrials hit 40,000 points for the first time,

while the dollar and bond yields ticked higher.

On the week, the dollar and yields are lower, and stocks are

higher. Broadly speaking, economic and inflation data this week

from the world's largest economy were soft, refueling investors'

belief that U.S. interest rates will be cut soon.

A batch of top-tier indicators from China on Friday will

shed light on how well - or otherwise - the world's second

largest economy is performing, and whether it is on track to

meet authorities' 5% GDP growth target for this year.

China's economic surprises index is at a three-month low,

evidence that activity has been weaker than expected or

forecasts were too high to begin with. If there is a consensus,

it is gravitating around the former rather than the latter.

The latest house prices, retail sales, urban investment,

industrial production and unemployment figures are broadly

expected to show economic activity accelerated last month.

The dark cloud of deflation hangs heavily over the economy -

the prolonged decline in producer prices could yet drag consumer

prices lower - so a set of numbers in line with, or exceeding

expectations on Friday would be welcome news for China bulls and

policymakers alike.

Chinese bond yields have slumped to all-time lows and the

U.S.-China yield spread has ballooned to historic wides. These

extreme scenarios have cooled in recent weeks - encouraging

economic numbers on Friday will likely extend that

'normalization' further.

Figures from Japan on Thursday, meanwhile, showed that the

world's third-largest economy fared much worse in the first

quarter than economists had expected, as first quarter GDP

shrank at an annualized rate of 2.0%.

That's the kind of number that could make the Bank of Japan

think twice about its policy 'normalization'. The yen and

Japanese bond yields retreated on Thursday but are still

slightly higher on the week.

Here are key developments that could provide more direction

to markets on Friday:

- China house prices, retail sales, urban investment,

industrial production, unemployment (April)

- Malaysia GDP (Q1)

- Hong Kong GDP (Q1)