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

Investors in Asia approach the end of a bumpy week hoping that the relative calm that descended on the dollar and a shortened U.S. bond market session on Thursday can extend into the local session on Friday.

With the December U.S. employment report looming large and markets still feeling the whiplash from the surge in global long-term bond yields this week, trading in Asia may end up fairly range-bound and subdued.

Nikkei futures are pointing to a flat open for Japanese stocks. The Nikkei is on track for a decline of around 0.7% on the week, underperforming the wider MSCI Asia ex-Japan index, which goes into Friday's session flat on the week.

Chinese stocks are also looking to end the week unchanged and unscathed. That can be interpreted two ways, however. It's welcome news, given the doom and gloom that continues to surround the outlook for China in the eyes of many investors.

On the other hand, Chinese stocks tumbled more than 5% the week before, their worst week in more than two years. In that light, failure to stage even a modest rebound the following week is a pretty ominous sign.

It's been a difficult start to the year for China bulls. Stocks are significantly lagging their regional and global peers, the bond yield collapse has been alarming, and uncertainty around a possible trade war with the U.S. is cutting deep.

According to Goldman Sachs ( GS ), financial conditions in China are the tightest since last April. Across emerging markets more broadly they are the tightest since November 2023.

China's latest inflation figures on Thursday weren't particularly encouraging either. Consumer and producer prices for December were broadly in line with forecasts, cementing the view that deflationary pressures are not lifting any time soon.

Economists at Barclays slashed their already weak 2025 CPI forecast to 0.4% from 0.8%, and they expect PPI inflation to remain in deflation throughout 2025. That would mark more than three years of falling factory gate prices.

And it could get even worse if the incoming Trump administration in Washington follows through with its aggressive tariff threats.

"We think a new trade war between China and the US would, on balance, have a deflationary effect, given downward pressure on exports would exacerbate the overcapacity issues in China," they warned.

The regional calendar is light on Friday, with the latest Japanese household spending figures most likely to move markets. Investors will be looking for early signs that recent wage agreements in Japan - the highest in decades - are beginning to lift consumer spending.

The Bank of Japan said on Thursday that wage hikes are broadening across the country, suggesting that conditions for a near-term interest rate hike may be in place.

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

- Japan's household consumption (November)

- India industrial production (November)

- Malaysia industrial production (November)