Manufacturing activity in Asia's top two economic powerhouses remained stuck in low gear in May, but an absence of inflation pressures suggested that authorities could inject yet more stimulus if needed.
The lackluster performance in China and Japan, along with alarmingly weak export data from South Korea and Taiwan, put the burden of supporting global growth squarely on Europe and particularly the United States, which is struggling to get back on track after a fierce winter.
China's factory activity contracted for the third straight month in May as domestic and export orders shrank, a private survey showed, adding to views that Beijing will have to roll out its most aggressive stimulus measures since the global financial crisis to avert a sharper slowdown.
"The subdued flash PMI print suggests there is no clear sign of near-term stabilization in (China's) economy. Risks to the outlook remain to the downside," Barclays economist Shengzu Wang said in a research note.
The flash or preliminary HSBC/Markit Purchasing Managers' Index (PMI) fell to 49.1 in May, weaker than an expected 49.3 and marking the fifth contraction in activity in six months.
China has already cut interest rates three times in six months and economists believe it will have to ease further as economic growth threatens to slow below the 7-percent pace seen in the first quarter.
Annabel Fiddes, an economist at Markit, said relatively strong deflationary pressures should leave plenty of scope for the authorities to implement further stimulus measures.
Analysts at Nomura saw China's growth slowing to 6.6 percent year-on-year in the second quarter, before edging up to 6.8 percent in the second half of the year.
"To offset the headwinds from deep-seated structural challenges, we maintain our call of further monetary easing with two more 50-basis-point (bps) cuts to banks' reserve requirement ratio and two more 25 bp policy interest rates cuts over the rest of this year," they said.
"The most likely timing for the next easing could be July, in our opinion, as it will take time for policymakers to assess the impact of policy easing taken so far."
In Japan, factory activity returned to growth as production and new orders picked up, but the improvement was tepid. The PMI edged up to 50.9, from 49.9 in April.
The report came on the back of official data this week that showed Japan's economy expanded in January-March at the fastest pace in a year.
However, much of that growth came from inventories as goods piled up on factory floors, and private consumption, housing investment and exports all rose but at a feeble pace.
Still, subdued input and output prices suggested inflation remained stubbornly low, adding to expectations the Bank of Japan will expand its already massive monetary stimulus program later this year.
Flash PMI readings for the euro zone are due at 0800 GMT, followed by the U.S. report at 1345 GMT.
Minutes of the U.S. central bank's April policy meeting released on Wednesday showed officials debated whether a slew of disappointing data, including weak consumer spending, signaled a temporary slump or evidence of a longer-lasting slowdown.
Most participants agreed economic growth would climb to a healthier pace and the labor market would strengthen.