Bottom line

Four down and two more to go... The Bank of Japan will meet this week amidst mixed economic signals. While first quarter GDP was positive for the first time since the first quarter of 2001, other economic data are not sending off the sparks necessary to continue positive growth. The bulk of the first quarter improvement stemmed from growing exports, which helped eliminate some inventory overhang and boost production. However the structural mess remains. The worry is that an improving economic scenario could take policy makers off the hook and the necessary unsavory changes could be postponed yet again.

The Federal Reserve doesn’t meet until month’s end. Market players seem to want things both ways. While they are relieved that the Fed hasn’t raised the Fed funds rate, at the same time, they think that higher rates will signal that the economy has recovered from its shallow recession.