(Reuters) - A look at the day ahead in Asian markets.

Asia's market spotlight on Friday shines brightly and almost exclusively on the Bank of Japan, notably the degree and pace at which it intends to continue normalizing monetary policy in the world's third largest economy.

The BOJ follows the European Central Bank last week and the U.S. Federal Reserve on Wednesday to complete the G3 central bank set, with investors keen to gauge policymakers' appetite for accelerating the exit from decades of ultra-easy policy.

All Japanese assets will be sensitive to the decision and guidance, but the broader ripple effects could be felt most in global currency markets if the yen moves significantly.

Wholesale price inflation from India and New Zealand's latest manufacturing purchasing managers index are released on Friday. Investors across the region are mostly in buoyant spirits following the surge in risk appetite after the Fed and perhaps more significantly, the latest U.S. inflation figures.

But all eyes are on the BOJ. Sources have told Reuters the BOJ will discuss whether to taper its bond purchases, but that the decision would depend on market developments leading up to the meeting.

There was a slight 'risk off' response to the Fed's revised economic projections and Chair Powell's press conference. But any caution was washed away by a huge wave of 'risk on' activity following the soft producer and consumer inflation data.

Emerging market and Asia-ex Japan stock indexes are up, world stocks hit a new high on Wednesday, the S&P 500 and Nasdaq on Thursday posted their fourth consecutive daily closing highs, cross-asset volatility is lower and credit spreads are tighter.

If BOJ policymakers are looking for a benign set of global conditions in which to begin tapering their bond purchases, this could be it.

The domestic scenario may be a little murkier with bond yields elevated and the yen still anchored at historically weak levels. But yields are off their highs and stocks have flat-lined for two months, so why not start the taper now?

Investors in China, meanwhile, will be looking forward to closing out a bruising week. Stocks are on for a fourth straight weekly loss, their worst run this year, while the yuan is anchored near its lows for the year and on Thursday registered its biggest fall on the spot market in three months.

Trade war fears are growing, and this week it was Europe-China tariffs that grabbed the headlines after the European Union slapped new tariffs on electric vehicles imported from China.

Auto stocks dragged European shares lower on Thursday, the pan-European STOXX 600 index sliding 1.3% for its biggest fall in two months. Beijing's response, whenever it comes, could send negative shocks through Chinese stocks.

Here are key developments that could provide more direction to markets on Friday:

- Japan interest rate decision

- India wholesale inflation (May)

- New Zealand manufacturing PMI (May)