Foreign exchange market. Asian session: the Japanese yen hits 3.5-month highs against the U.S. dollar after the Bank of Japan left monetary policy unchanged

Economic calendar (GMT0):

00:30    Australia                Westpac Consumer Confidence         May              +0.3%                -6.8%

01:30    Australia                Wage Price Index, q/q                       Quarter I       +0.7%  +0.8%   +0.7%

01:30    Australia                Wage Price Index, y/y                       Quarter I       +2.6%  +2.6%   +2.6%

03:00    Japan                    BoJ Interest Rate Decision                                      0.10%   0.10%   0.10%

03:00    Japan                    Bank of Japan Monetary Base Target                       270        270      270

03:00    Japan                    BoJ Monetary Policy Statement                                                            

05:00    Japan                    BoJ monthly economic report  May                                     

07:30    Japan                    BOJ Press Conference                                               

08:00    Eurozone               Current account, adjusted, bln          March            21.9      24.2       18.8

08:30    United Kingdom     Retail Sales (YoY)                               April               +4.2%   +5.3% +6.9%

08:30    United Kingdom     Bank of England Minutes                                                          

08:30    United Kingdom     Retail Sales (MoM)                              April              +0.1%  +0.4%   +1.3%

The U.S. dollar traded lower against the most major currencies amid the release of Federal Reserve's meeting minutes later in the day. Market participants are awaiting the Fed's view of the economy. Recently published U.S. economic data was mixed and showed uneven recovery of the U.S. economy.

The New Zealand dollar traded near 3-week lows against the U.S. dollar. Declining dairy prices and the weak economic data in Australia had a negative impact on the kiwi. Dairy prices at the GlobalDairyTrade auction declined. Market participants speculate that the New Zealand dollar is overvalued as Reserve Bank of New Zealand governor Graeme Wheeler warned this month. No economic data was published in New Zealand.

The Australian dollar decreased against the U.S. dollar after the release of the weak economic data in Australia. The Westpac consumer sentiment in Australia decreased 6.8% in May, after a 0.3% gain in April.

Wage prices in Australia increased 0.7% in the first quarter (Q4 2003: +0.7%). Analysts had expected a 0.8% rise.

The Australian dollar also came under pressure due to the falling iron ore prices. Iron ore is Australia's biggest export (about 20% of all exports).

The Japanese yen hits 3.5-month highs against the U.S. dollar after the Bank of Japan left monetary policy unchanged on Wednesday. The Bank of Japan will continue to increase the monetary base at a pace of ¥60 trillion to ¥70 trillion per year. Japan’s central bank expects a moderate economic recovery.

Japan’s trade deficit was ¥808.9 billion in April, compared to a deficit of ¥1,714.2 billion in March. Analysts had forecasted a deficit of ¥640.0 billion.

EUR/USD: the currency pair traded mixed

GBP/USD: the currency pair traded mixed

USD/JPY: the currency pair declined to Y101.16

The most important news that are expected (GMT0):

14:00    Eurozone    Consumer Confidence May       -8.6       -8.0       

14:00    U.S.            FOMC Member Dudley Speak                                               

15:30    U.S.            Fed Chairman Janet Yellen Speaks                                                       

17:30    U.S.            FOMC Member Narayana Kocherlakota                                                           

18:00    U.S.            FOMC meeting minutes