Japan's trade deficit rises, BoJ holds off further easing

Japan's trade deficit worsened in April. A report on Wednesday showed that the trade deficit rose 69.7 percent from a year ago to 879.9 billion yen.

While exports rose 3.8 percent in April from a year ago, imports jumped 9.4 percent, partly as a result of a weaker yen.

The yen has been weakening ever since the Japanese government and the Bank of Japan made it clear that they will be trying to stimulate the economy.

However, the BoJ announced no new easing measure after its monetary policy meeting on Wednesday.

Meanwhile, the Bank of England could yet provide further monetary stimulus after a report on Tuesday showed that inflation fell in the UK in April. Inflation eased to 2.4 percent last month from 2.8 percent in March, with almost half of that drop coming from weaker petrol and diesel costs.

Also on Tuesday, the Federal Reserve provided no indication that it is about to wind down its own monetary stimulus. St Louis Fed President James Bullard told reporters after delivering a lecture in Frankfurt that he “can't envision a good case to be made for tapering unless the inflation situation turns around”. New York Fed President William Dudley told the Japan Society in New York on Tuesday that he could not be sure whether policymakers would next reduce or increase the amount of purchases due to the “uncertain” economic outlook.

The absence of any explicit talk of a withdrawal of monetary stimulus helped push the S&P 500 to another all-time high on Tuesday.