Aug 12 (Reuters) - A look at the day ahead in Asian

markets.

A week is not just a long time in politics.

Seven days ago a huge unwind in the yen carry trade and

selloff in megacap U.S. tech triggered a wave of volatility that

sent global markets reeling and investors running for the safety

of U.S. Treasuries.

As the new trading week gets underway in Asia on Monday,

that seems a long time ago - many assets have recovered much of

these losses, volatility has subsided, and traders have heavily

scaled back their rate cut expectations.

The question now is whether that momentum can be sustained.

Some investors will seize upon lower equity volatility to push

up risky assets again; others will be wary of potential

aftershocks in any corner of the market, especially in

mid-August when liquidity is much thinner than usual.

Monday's Asian calendar is light. Indian consumer price

inflation is the main event, leaving markets at the mercy of

global forces.

If that's the case, Monday should be relatively calm. Wall

Street rose on Friday, meaning the Nasdaq and S&P 500 ended last

week essentially flat. Treasury yields fell on Friday but

registered their biggest weekly rise in months.

Stronger-than-expected U.S. economic data suggesting

recession fears are overblown, and a couple of poorly-received

U.S. debt auctions, pushed yields higher. No bad thing, perhaps,

if you think the previous week's plunge was excessive.

Asian markets' rebound last week was pretty impressive.

After the Nikkei registered its second biggest fall on record

and its third largest ever rise in the space of 24 hours, the

index ended the week down only 2.5%.

Other benchmark indices fared even better - the MSCI Asia

ex-Japan and MSCI World index both ended flat, and the MSCI

Emerging Market index rose 0.2%.

In currencies, U.S. futures market data on Friday showed

that hedge funds slashed their net short yen position in the

week to Aug. 6 by 62,000 contracts. That is the biggest

yen-bullish weekly swing since the Fukushima disaster in

February 2011, and third biggest since comparable data started

in 1986.

If this is representative of the broader FX market, the

short yen 'carry trade' has been mostly wiped out. Do traders

begin shorting the yen and putting on carry trades again, or

not?

Indian inflation is the main data point in Asia and comes

after the Reserve Bank of India last week kept its key interest

rate unchanged at 6.50%, dismissing the market turbulence and

focusing on getting inflation down to its 4% medium term target.

The consensus in a Reuters poll is for annual consumer

inflation in July to fall to 3.65% from 5.08% in June. That

would be the first time in five years below the RBI's

medium-term target.

Here are key developments that could provide more direction

to Asian markets on Monday:

- India interest rate decision

- India industrial production (June)

- Germany wholesale inflation (July)