A week of major event risk should continue to generate pound volatility highlighted by the release of the Bank of England minutes from its January policy meeting.

Short-term interest rates seem to be telling a different story for the Japanese yen.

The final 3Q GDP reading is expected to show a 0.1% contract amid an initial forecast for a 0.3% drop in the growth rate, and the data is likely to encourage an improved outlook for the region as policy makers see the economy emerging from the worst recession since the post-war period.

Recent doubts on outlook for UK debt ratings are likely to continue through the medium to long term, as large budget deficits and a fast-growing national debt have forced rating agencies to question whether major world governments’ debt truly deserves risk-free status.

Japan seems to be on a path to more rather than less expansionary policy of both the fiscal and the monetary variety.

If stocks are to continue lower, the yen looks well-positioned to build on recent gains as investors dump all manner of risky assets.

Economists are expecting that the manufacturing and service sectors continue to expand with both PMI readings forecasted to remain above 50.

Although scheduled event risk is ample on next week’s Japanese data docket, the market-moving potential of upcoming releases is limited at best.

Consumer Price Index numbers and mid-week Bank of England monetary policy minutes will likely be the major highlights in the week ahead, but traders should likewise keep an eye out for late-week UK Retail Sales results.

Though they are inextricably linked, economic health and interest rate policy post two very unique concerns for sterling traders.