1. Japanese Overall Household Spending
2. Japanese Consumer Prices
3. Japanese Industrial Production
4. Bank of Japan Rate Decision
5. Canadian GDP
6. U.S. Gross Domestic Product
7. U.S. Chicago PMI

Japanese Overall Household Spending (YoY) (MAR) (23:30 GMT; 19:30 EST)
Consensus: -0.3%
Previous: -1.5%

Outlook:  Economists are expecting household spending levels to have continued their decline through March with a retraction of 0.3%.  Although employment levels and earned wages have been trending higher in the Japanese labor market, recent pinches on personal income may have hurt consumption over the month.  Traditionally, Japanese consumers have been very sensitive to even the slightest strains on personal income.  A recent repeal of tax benefits and soaring utility costs thus far in 2006 are expected to be a drag on consumption.  Anticipating that the nationâ�,��"�s economy would pick up steam significantly on consumer expenditures, the Bank of Japan recently reduced its target figure for money supply as a precursor to interest rate tightening in the future.  While a dip in consumer spending is unlikely to reverse the BoJâ�,��"�s clear intention of pursuing higher interest rates in the future, it may certainly delay any tightening action for the time being.   

Previous: Household spending in Japan fell 1.5% to �,¥269,418 in February, suggesting that a decline in consumption may hold back economic growth this year.  The decline represented a change from the same time one year earlier as no month-to-month figure was published after an alteration was made in how the spending report is compiled.  Surprisingly, the drop in spending came in spite of a decline in the nationâ�,��"�s unemployment rate to 4.1%--the lowest level in over seven years.  Most likely, the sudden drop in spending enthusiasm resulted from a repeal in tax breaks which took effect in January.  In fact, economists feel that January brought an increase in spending only because of heavy discounting on seasonal goods.  With no sales to take advantage of the following month, consumersâ�,��"� sensitivity to a reduction in tax leniency became more visible in February.  

Japanese Nationwide Consumer Prices (MAR) (23:30 GMT; 19:30 EST)
                    (MoM)    (YoY)
Consensus:   -0.1%     0.4%
Previous:       -0.1%     0.4%

Outlook:  Nationwide, consumer prices are expected to have grown 0.4% in Japan; potentially tallying the third consecutive rise in the measure.  The more important figure however will be the core, annual figure expected to be exceed the previous two months with 0.6% inflation.  Expectations of such price growth have come very readily for Japan as consumer sentiment runs high allowing companies more scope to pass on higher manufacturing costs onto the consumer.  Japanese firms have endured crude oil prices that have nearly doubled over the past two years as of March, but that may soon come to an end.  If consumer prices can rise for the fifth month, the Bank of Japan will better be able to make a case that 7 years of deflation has officially come to an end and a hike in the benchmark-lending rate is reasonable.  Policy officials have not raised borrowing costs for five years and Japanese politicians have continue to argue that doing so now would only sabotage the cautious levels of growth seen so far this year.

Previous:  Core consumer prices for the worldâ�,��"�s second largest economy rose for the forth consecutive month in February, persuading Toshihiko Fukui to abandon the BoJâ�,��"�s five-year long policy of flooding the economy with cash.  While measured on a monthly basis, and including volatile energy and food prices, Japanese prices declined; the more significant, core annual measure rose at an over six-year high 0.5%.  Inflation over the period was primarily influenced by growingly optimistic Japanese consumers that have pushed domestic and import prices higher.  Japanese confidence was influenced in February by an employment rate at a nearly 8-year low, 4.1% and 0.4% wage growth, the fifth rise in the past six months.  Shoppers then used this blooming confidence to push import volumes to their highest levels in almost 10 years and raise land prices in Japanâ�,��"�s three largest cities for the first time since 1990. 

Japanese Industrial Production (MAR P) (23:30 GMT; 19:30 EST) 
                     (MoM)  (YoY)
Consensus:     0.2%  3.1%
Previous:       -1.2%  3.9%

Outlook:  Marchâ�,��"�s industrial production figures are expected to reveal the continuation in Japanâ�,��"�s manufacturing sector with increased output of 0.2%.  Demand for automobiles and flat-panel televisions continues to soar, which will force producers to crank up output in coming months.  Activity on the microeconomic level suggests increased production for both of these goods.  Toyota Motor, Japanâ�,��"�s largest automaker, revved up domestic production by 7.5% in February.  Similarly Matsushita Electric Industrial Co., the worldâ�,��"�s largest manufacturer of plasma televisions, has said it will increase capacity in western Japan by 30%.  Accelerating growth in foreign economies bodes well for Japanâ�,��"�s industrial sector as well.  Economic expansion in the U.S., the largest importer of Japanese goods, is expected to fall in at 4.7% in the first quarter.  Such rapid economic growth led to a 22% increase in Japanese exports to the U.S. in January and will likely have the same effect over the quarter.  With demand showing no relent overseas, Japanese producers have a healthy market for their products. 

Previous: In February, Japanese industrial production volume decreased by 1.2% from the previous month.  The monthly decline, however, painted a misleading picture of the general trend in the nationâ�,��"�s manufacturing sector.  For the past four years, February has posted a decline in output volume as a result of the seasonal adjustments to the figure.  Manufacturing during this time of the year is largely disrupted by observance of the Lunar New Year holidays in the region.  In contrast to the monthly figure, industrial production on an annual basis increased by 3.9% as the year-to-year figure is not affected by seasonal adjustments.  As such, a decline in the month-to-month figure should not be regarded as a derailing of the nationâ�,��"�s industrial boom.  Output cuts by chemical companies were responsible for nearly a third of the decline in overall production.  This does not necessarily represent a downtrend in chemical production in the longer term, however, as chemical companies were also responsible for one-third of the overall industrial gains realized in both December and January.  

Bank of Japan Rate Decision (23:30 GMT; 19:30 EST)
Consensus: 0.0%
Previous:  0.0%

Outlook:  Japanâ�,��"�s usually mum monetary policy body will come to the table Friday to weigh in on strengthening economic data that has spurred fierce debate over whether the central bank should lift lending rates off their current 0.0% level.  While many a trader hopes the bank will finally shift its stance at this meeting, economists are resoundingly doubtful of such an outcome.  There are a few reasons for this conservative view.  Foremost, the recent string of inflationary data comes amid the first recovery in the economy that has been driven by domestic investment and demand rather than external sources of government spending.  Since 1990, the island-nationâ�,��"�s economy has fallen into recession three times.  Additionally, some hesitation among policy makers has evolved from the fact that, while inflation in the consumer-product arena have seen an impressive run, they are still relatively low with the core, nationwide figure at 0.5% in February.  Some economists theorize, the BoJ will accept price growth between 1% and 2% on an annual basis when sustainable inflation becomes clearer.   Likely the more telling event for the day will come from the report the central bank will give a little after the rate decision.   The statement is expected to address government calls for the bank to clarify its policy stance by indicating when and by how much they will raise interest rates in the future.

Canadian Gross Domestic Production (MoM) (FEB) (12:30 GMT; 08:30 EST)
Consensus: 0.2%
Previous:  0.2%

Outlook:  Canadaâ�,��"�s economy, the worldâ�,��"�s ninth largest, is expected to have experienced 0.2% growth over the month of February - duplicating the performance the economy reported the previous month.  Contributors to the periodâ�,��"�s expansion are hard to hard to come by.  Consumers, who make up a majority portion of the economy, were riding high off of a 6.4% jobless rate, the lowest the measure has been in 30 years.  Moreover, Canadian consumers were able to hold on to a greater percentage of their incomes with lower heating oil and gasoline prices vying for less of their incomes.  However, initial indicators for the period are not promising.  Retail sales in February dropped 0.4% for the first decline in five months while those in at wholesalers plummeted 1.1%.  The housing market, though dipping for the period, showed continued upward momentum with starts up 241,900 on an annual basis and prices up 0.7%.  On the other hand, weakness among manufacturers and energy producers could have held growth in check.  Energy product prices experienced sharp retracements in February while manufacturers still felt the backlash of higher input prices with activity falling 2.2% for the period.  After boosting the overnight lending rate to 4.00% on Tuesday, the Bank of Canada will be looking at the pace of expansion for the coming months to see if it will be able to keep up with current levels of inflation and adjust monetary policy from there.

Previous:  The Canadian economy tallied 0.2% growth in the opening month of the year as revenues from retailers and wholesalers were countered by declines in energy production.  Recording one of the warmest Januarys in Canadaâ�,��"�s history, consumers swarmed to stores.  Wholesalersâ�,��"� sales rose 1.2% largely due to purchases of autos while retailers moved 0.9% more product off of shelves with gift card redemptions and inviting weather.   The service sector was also enjoying the increased store visits with companies growing 0.5%.  However, despite the broad-based growth, economic expansion in January was the slowest in four months.  This was largely due to the 2.7% drop in energy sales.  Though warm temperatures benefit other industries, the energy sector had to deal with an estimated 18% drop in heating needs.  As Canadian growth begins to show signs of sputtering, the level of speculation over an early end to the Bank of Canadaâ�,��"�s hawkish rate policy has risen.

US Gross Domestic Product Annualized (1Q A) (12:30 GMT; 08:30 EST)
Consensus: 4.9%
Previous:  1.7%

Outlook:  Economic growth in the worldâ�,��"�s largest economy is expected to have more than just rebounded in the first three months of this year, it is anticipated to have accelerated to its fastest pace in more than two years.  The recovery in the first quarter of the year was in large part attributable to a January that was the warmest on record.  Retailers, homebuilders and even firms were all enjoying the spring-like weather.  Firms, whom are forecasted by officials to be the backbone to US growth in the months to come, were reaping the benefit of lower fuel costs and higher demand owing to the temperature.  Durable goods, a measure of goods with an expected life span of three years or more, rose 2.7% in February while the recently released beige book released by the Federal Reserve reported steady or better growth in all of the countryâ�,��"�s regions except New York.  Consumer side strength is also lending its support to growth.  Retail sales in January rose a 4-year high 3% while housing starts surged 13.8%, a 13-year record pace.  Overall consumer spending is expected to have grown 5% over the same quarter.  While economic growth numbers are primary indicators for governments, economists and traders; the high expectations belie doubtful forecasts for the coming months pace.  With energy prices heaping additional burdens on both companies and households and the housing market slowly leaking value, growth dependant on consumer spending, housing value or business investment could be suspect.  Furthermore, if the first quarter expectations prove too optimistic, the effect on the Fedâ�,��"�s stopping point for rates could be abrupt.

Previous:  After a series of revisions, gross domestic product in the US reportedly grew 1.7% in the final quarter of 2005, the slowest pace for the behemoth in 3 years.  Detracting from growth in the final months of the year was the sudden drop in consumer spending, weaker business investment and a swelling trade deficit.  Over the period, the personal consumption expenditure price index, a measure of core consumer prices, rose 2.4% compared to 1.4% over the three months ending in September.  Consequently, consumer spending, which accounts for nearly 70% of the economy, rose only 0.9%; the slowest pace since 1995.  Even excluding volatile heating and gasoline costs, their effects were still felt via weak auto sales.  Businesses were also responding to higher input costs by conserving their investment dollars.  Firm investment slowed to 4.5% from 8.5% in the third quarter.  Additionally, acting as a special burden growth for the period, was the largest trade shortfall ever in October, which is estimated to have subtracted 1.36% from fourth quarter expansion.  Despite the sharp deceleration in growth, the Fed Reserve held fast to their policy of undeterred rate hikes with accompanying comments speculating that the downturn in the economy was â�,��"temporary.â�,�

US Chicago Purchasing Manager Index (APR) (14:00 GMT; 10:00 EST)
Consensus: 58.3
Previous:  60.4

Outlook:  Manufacturing activity in the Chicago area is expected to contract modestly in April as higher input prices put constraints on the nationwide trend of improving output.  The Fedâ�,��"�s Beige Book, released on the 26th, offered a preliminary look at the regions factory health.  According to the Chicago Fedâ�,��"�s report, heavy equipment and mining companies performed especially well through the latter half of March and the first half of April, the period for which the report pertains.  Orders for mining equipment have booked production capacity through 2007.   Notably, while light vehicle sales were flat for the period, orders for heavy and medium-duty trucks held steady as clients made their purchases ahead of the new EPA standards going into effect.  However, despite these positive comments from Federal officials, the market continues to predict a mild reduction in factory activity for the region, largely due to the record high crude oil prices reached in April.  Currency traders and Fed Reserve officials alike will look to the Chicago PMI number to help garner a better view of US manufacturing health following the modest rise in the Philadelphia measure and the plunge in the New York read.

Previous:  The National Association of Purchasing Managerâ�,��"�s regional manufacturing revealed manufacturing conditions in the Chicago area were at their best in three months in March.  Component measures showed general improvements across most areas interest.  The employment component improved to a read of 55.6 from 54.9 in March.  Production levels also jumped, to a 65.1 level from 56 the month prior.  With orders rising in line with production levels, many officials and economists expect manufacturers will continue to ploy money into investments in an attempt to expand capacity that is already being pushed.  Also noteworthy was the dip in the prices paid index.  The component read fell from 71.6 in March to 71.1 despite higher prices for fuels and many industrial and precious metals.   After integrating the nationâ�,��"�s overall factory health into its economic health project, the Federal Open Market Committee decided to raise its overnight lending rate ounce again.

Richard Lee is a Currency Strategist at FXCM.