On Monday, the Bank of Japan will announce its interest rate, which is expected to remain at 0.50%. Julian Jessop, chief international economist from Capital Economics, said the bank's decision to hold will not come as a surprise. However, he expects the BOJ to hike rates in the near future.

"The Q1 GDP data - despite the many caveats - support the view that economic growth will remain at or above its potential rate, which the Bank now puts at 'around 1.5% or slightly higher" he said in his research notes. "Given that the economy has already been growing at or above this rate over the last five years (resulting in a positive 'output gap'), this would maintain the upward pressure on inflation. We are therefore sticking with our call that the next move in rates will be a hike, and that it will come earlier than generally anticipated."

Turing to Australian data, Riki Polygenis, an economist from ANZ bank, said that the RBA minutes are likely to show that the tightening financial conditions will lower domestic demand and drag down inflation.

Economists from Westpac are expecting the Australian consumer sentiment index to fall to its lowest level since 1993. The consensus is calling for the index to fall 1.3% following a similar fall in the previous month.

Economists from Westpac said some of the factors that will positively effect the index are a hold on official rates in May and continued signs of improvement in global financial markets. However, rising oil prices rises and weakening of local housing markets will have a negative impact on the index.

All times in EST

Sunday:

The Bank of Japan will start its two-day monetary policy meeting. Economists expect the bank to hold rates steady at 0.5%.

19:50 JN Loans Individual Hfund (Y/Y) 1Q Prior: 3.0%

21:30 AU Preliminary BoP Imports (M/M) (SA) April Prior: 1.0%

18-MAY JN BOJ to Hold Regular Policy Board Meeting

Monday:

Monday will be a big day for economic data in Australia and Japan.

The Bank of Japan will announce its interest rate policy, which is expected to remain at 0.5%. In other Japanese data, markets will receive Tokyo and nationwide department store sales for April. In March, Tokyo sales fell 0.7% while national sales decreased 1.2%.

In Australia, markets will receive the Reserve Bank of Australia's minutes from the May monetary policy meeting, during which the RBA held rates steady at 7.5%.

1:30 JN Tokyo Department Store Sales (Y/Y) April Prior: -0.7%

1:30 JN Nationwide Department Sales (Y/Y) April Prior: -1.2%

19:50 JN Tertiary Industry Index (M/M) March Exp: 0.5% Prior: -1.7%

21:30 AU Reserve Bank's Board May Minutes

22:30 AU Australian Treasury Chief Ken Henry Speaks in Sydney

19-May JN BOJ Target Rate 20-May Exp: 0.5% Prior: 0.5%

Tuesday:

Japan's leading economic index for March will be released, which rose 20.0% the previous month. In more Japanese data, March's coincident index will also be released, which rose 33.3% in February.

Meanwhile, Australian markets will receive Westpac consumer confidence for May, which fell 1.3% in April.

1:00 JN Coincident Index March Final Prior: +33.3%

1:00 JN Leading Economic Index March Final Prior: +20.0%

3:00 JN Convenience Store Sales (Y/Y) April Prior: -0.6%

20:30 AU Westpac Consumer Confidence May Prior: -1.3%

21:30 AU New Motor Vehicle Sales (M/M) April Prior: +1.0%

21:30 AU New Motor Vehicle Sales (Y/Y) April Prior: 3.7%

Wednesday:

In addition to weekly Japanese investment data, markets will also receive merchandise trade balance report for April. The consensus is calling for a surplus of ¥739.0B, down from March's surplus of ¥1118.6B. The adjusted trade balance from April is expected to show a surplus of ¥796.0B, up from March's surplus of ¥770.0B.

19:50 JN Merchandise Trade Balance Total April Exp: +¥739.0B Prior: +¥1118.6B

19:50 JN Adjusted Merchandise Trade Balance April Exp: +¥796.0B Prior: +¥770.0B

19:50 JN Foreign Buying Japan Stocks Week ending May 16 Prior: -¥15.5B

19:50 JN Foreign Buying Japan Bonds Week ending May 16 Prior: +¥27.3B

19:50 JN Japan Buying Foreign Stocks Week ending May 16 Prior: +¥52.5B

19:50 JN Japan Buying Foreign Bonds Week ending May 16 Prior: +¥924.3B

19:50 JN All Industry Activity Index (M March Exp: -0.2% Prior: -1.4%

21:00 AU Consumer Inflation Expectation May Prior: +4.3%

Thursday:

The focus for the end of the week will be on the Bank of Japan's minutes from its April monetary policy meeting, during which the bank held rates unchanged at 0.50%. Furthermore, the Japanese government will release its monthly economic report for May.

1:00 JN Supermarket Sales (Y/Y) April Prior: +1.4%

19:50 JN Bank of Japan to Publish Minutes of April 8-9 Board Meeting

22-May JN Cabinet Office to release May Monthly Economic Report

Friday:

No data from Japan or Australia is expected to be released.

By Neils Christensen, This email address is being protected from spam bots, you need Javascript enabled to view it , edited by Nancy Girgis, This email address is being protected from spam bots, you need Javascript enabled to view it