Agreement on Brexit, the pound and the Chinese economy in focus

Asia "will face serious contagion effects" of Brexit only in the unlikely event that the UK would leave the EU without an agreement in place, known as "hard Brexit", has said Nomura's Rob Subbaraman in a note. He added that this would likely drive the UK economy into recession and cause a sharp depreciation of the pound.

"In terms of commercial channel, the United Kingdom is not a major export market for Asia." India is the most exposed country, followed by China ", did he declare. "On the other hand, reflecting the UK's position as a global financial hub – the assets of the UK financial sector account for more than 8 times its GDP – the financial channel is important."

Subbaraman pointed out that UK banks have relatively large claims on Asia, especially in financial centers such as Hong Kong and Singapore, as well as in Malaysia and Taiwan.

"A massive sell off of the asset market could add to this financial channel, negatively affecting wealth, confidence and liquidity," he said, adding, "We only think in the unlikely event of 39, a difficult Brexit, a high risk of banks withdrawing from Asia and activating these financial channels ".

Overall, he said, it is likely that the current Brexit saga will remain "a parallel show for Asian economies".

Elsewhere, the dollar index, which measures the greenback versus a basket of peers, traded at 96.649 against a basket of peers at 14.51. HK / SIN, down from levels above 97,000 at the start of the week. The Japanese yen, considered a safe haven currency, traded at 111.56 to the dollar.

– Holly Ellyatt of CNBC contributed to this report.