1. Japanese Leading Economic Index
2. FOMC Rate Decision

Japanese Leading Economic Indicator Index (MAR P) (05:00 GMT; 01:00 EST)
Consensus:  60.0%
Previous:  90.9%

Outlook: The Japanese indicator measuring expected growth in key sectors for the coming 3 to 6 months is expected to notch its 50th consecutive month of growth In March, bringing the index yet another month closer to breaking the record for the longest recovery following a recession since the 57 month Izanagi Boom in 1965.  Expectations for March however will take a significant hit from February's figure by dropping to 60%.  A read above 50% is indicative of growth.  Contributing to the read this time around were a few repeat contributors.  The jobless rate, stocks, trade, retail sales and industrial production will all make their mark on the overall read.  While the unemployment rate, stock market and trade balance had already posted positive contribution the month before, retail activity and industrial production were particularly noteworthy.  Retail sales in March rose 1.0%, following a 1.1% rise in February.   Industrial production on the other hand returned to positive territory with a 0.2% increase following two months of contraction.  Threats to the composite read lie in confidence figures and household spending.  Confidence fell to a three month low in March with restored fears over energy prices while in turn household spending dropped 1.2%, for the third straight monthly contraction.  With expectations of growth firmly engrossed in the economy, a shift off of the BoJ's five-year dovish policy regime becomes more and more likely.

Previous: Japan's leading economic indicator composite index rose to 90.9% in February, its highest level since August of last year, as consumer confidence led the way.  In February, consumer confidence rose to the measures highest read in its short-lived history - going back to April 2004.  Leading to the boost in shoppers' sentiment came from a potent mixture of a jobless rate experiencing its biggest drop on record to 4.1%, a seven year low; and wages that rose for the fifth month in six.  Additionally, retail sales bounded back to score a 1.1% rise while the trade balance handily rebounded from its first deficit in decades to a 946 billion yen surplus.  Also supplying unordinary support for the month was the stock market component. Japanese stocks rose to a five-year high during the month, extending a rally that has been nearly a year in the making.

FOMC Rate Decision (18:15 GMT; 14:15 EST)
Consensus: 4.75%
Previous:  5.00%

Outlook:  Economic data released since the Fed's last rate decision on March 28th where officials decided to raise the benchmark interest rate another quarter of a percentage point to 4.75% has began to match the wayward tone that speculators have begun to assume - especially concerning inflation.  While general economic growth numbers have held strong, the necessity to control inflationary pressures seems to be in full retreat.  Over the period, the jobless rate has dropped to a four and a half year low 4.7%, retail sales rose back to a positive 0.6% and a measure of GDP reported a huge rebound in economic expansion to 4.8%. However, these gauges were somewhat overshadowed by softer inflationary gauges that are vital in considering monetary policy.  On the firm side, the producer price index, a measure of prices received from producers of commodities at all stages of processing, fell on an annual eased on an annual basis to 3.5% from 3.7% the month before.  Furthermore, over the first quarter, costs for employees backed off slightly from the quarter prior to expand 0.6%.  More convincing of the approaching halt in hikes were the consumer inflationary reports.  The annual consumer price index, one of the most popular measures of inflation amongst government officials and economists, grew at a slower 3.4% clip in March from a year ago.  Even more significant was the repeat 2.1% rise in the core figure from the year ago.  However, despite the slightly reduced pace of price growth, another 25 basis point hike to 5.00% seems nearly assured according to futures markets.  With consumer inflation still well above 3% and rising energy prices a constant threat in the medium term, there is little doubt the Fed will respond by sticking to its hawkish regime and taking the edge off of price growth.  The real uncertainty now, as it has over the past few meetings, lies with the comments that will accompany the release as to whether this trend can hold only to 5% or beyond.

Previous:   Stepping up to the podium, green Fed Chief Ben Bernanke held true to Alan Greenspan's policy regime by raising the benchmark lending rate another quarter point to 4.75% at the Federal Open Market Committee's May 28th meeting.  However, the true aspect taken away from the meeting were complimentary and auxiliary comments from policy members that seem to hint that the 15 consecutive 25-basis point hikes maybe coming to an end.  Generally, Bernanke and the other policy members recycled much of the same commentary.   "Some futher policy firming may be needed," and the Fed "will respond to changes in economic prospects as needed."  Speculation over the change in policy stance really came from comments outside the official meeting statement.  Bernanke said in his statement to Congress that  "longer-term inflation expectations appear to have been contained."  While San Francisco Fed President Janet Yellen went so far as to say she had some concern that the central bank may "overshoot" the mark in its current rate regime.  Yellen and Bernanke's comments hold weight with the data.  The Fed's favored measure of inflation, the core personal consumption expenditure indicator, grew only 1.9% in January from the year before, within Bernanke's stated 1% to 2% comfort zone. 

Richard Lee is a Currency Strategist at FXCM.