Sterling pound hit session highs against the dollar on Thursday, after official report confirmed that the U.K. economy expanded by 0.3% in the first quarter of this year.

The Office for National Statistics said U.K. GDP expanded by 0.3% in the first quarter, in line with expectations and unchanged from an initial estimate. The economy expanded 0.6% from a year earlier, also unchanged from an initial estimate.

GBPUSD pair is currently trading around $1.5071 while recording the highest level of $1.5081 and lowest of $1.5013. The general trend over short term basis is to the downside as far as areas of 1.5770 remains intact targeting 1.4355.

The trading range for this week is among key support at 1.4825 and key resistance at 1.5130.

The dollar dropped against its major counterparts on Thursday after Federal Reserve Chairman Ben Bernanke said Wednesday the bank could begin tapering its bond-buying program in the "next few meetings”.

In testimony to the U.S. Joint Economic Committee on Wednesday, Bernanke said a decision to scale back the Fed’s stimulus could be taken in the "next few meetings" depending on economic data. While Wednesday’s minutes from the U.S. central bank’s May meeting showed a "number" of policymakers were prepared to taper bonds purchases sooner than expected.

The greenback is currently trading at 83.98, compared with the session’s opening of 84.46. The USDIX has so far recorded an intraday high of 84.59 and a low of 83.88.

The Japanese yen jumped against the euro and the U.S dollar as signs China’s economy is slowing and the prospect of a reduction in U.S. monetary stimulus boosted demand for safer assets like yen

The preliminary reading of a Purchasing Managers’ Index for China’s manufacturing declined to 49.6 in May from 50.4 the previous month.

USDJPY pair dropped sharply in line with the negative expectations and broke 101.80 levels; the general trend over short term basis is to the upside as far as areas of 96.50 remain intact targeting 105.60.

The USDJPY trades at 101.39, sharply down from an opening of 103.13. EURJPY pair declined to 130.61 after opening at 131.93.

In the euro zone, data showed that the region’s manufacturing and services sectors remained in contraction territory in May. Euro rose after data showed Eurozone manufacturing purchasing managers’ index came better than expectations in May, adding to signs the currency bloc is starting to emerge from its record-long recession.

A composite index based on a survey of purchasing managers in both industries rose to 47.7 from 46.9 in April, but still well below the 50 level that separates growth from contraction.

The EURUSD pair rose to $1.2879, from an opening at $1.2852, after hitting a high of $1.2903, and a low of $1.2821. The trading range for today is among the key support at 1.2720 and key resistance at 1.2905.

Amid confusion over Ben Bernanke`s comments late Wednesday, China’s economic outlook took a fall after manufacturing contracted  unexpectedly  in May. The MSCI Asia Pacific Index plunged 3.7% to 138.16 as of 15:57 in Tokyo.

“Bernanke’s comments and China’s PMI data provided the trigger for a sell-off. Technically, Japanese shares have been overbought and were vulnerable for a correction," said Shane Oliver from AMP Capital Investors, Sydney.

The yen hit a low of 101.02 today while the dollar index jump to a 3-year high at 84.59 as the appetite for safe haven increased after the Fed minutes triggered speculations the central bank may begin to pull back on its monetary stimulus this year.

Comments from the Federal Reserve Chairman Ben Bernanke confirmed that reducing the bond purchases will depend on an improvement in the economic data but , he  added that the Fed could "in the next few meetings take a step down" in its purchases.

Manufacturing in China shrank for the first time in seven months to 49.6, reflecting slower domestic demand which is unable to offset softer demand from the U.S. and the eurozone, darkening the outlook for growth in the world’s second largest economy.

- Hong Kong’s Hang Seng closed 2.54% lower at 22669.68

- China’s Shanghai Composite Index closed 1.13% lower at 2275.67

In Japan, the stock market saw a very volatile session finishing over 7% lower after gaining 2% in early trade. The weak Chinese data, the confusion over Bernanke`s comments, the rising Japanese bond yields and the strengthening yen contributed to this move.

The plunge in Japanese stocks was the biggest since the aftermath of March 2011 tsunami and nuclear disaster. The financial companies were sold-off across the board due to the rising bond yields, while in Osaka, the futures trading was suspended.

“Japanese banks sit on a huge amount of government bonds and if yields are moving up too quickly, the asset quality of the banks is coming under pressure and you`ve got a negative impact on the economy," said Chris Weston from IG.

- Nikkei 225 closed 7.32% higher at 14483.98

- Topix closed 6.87% higher at 1188.34

Australia`s stocks fell almost 2% hitting a 1-month low as the Australian dollar fell to a 1-year low against the greenback at 0.9592 with the financials leading the losses with a 4% decline for Westpac.

- S&P/ASX 200 closed 1.99% lower at 5062.45

- New Zealand’s NZX 50 closed 0.47% lower at 4588.59

The South Korean stocks tracked the weakness in broader Asian markets although the yen strengthened improving the outlook for domestic exporters. Kospi retreated from a seven-week high on Wednesday.

- Kospi closed 1.24% lower at 1969.19

Britain`s grew an unrevised 0.3 percent, up from both advanced and expected readings, in the first quarter of 2013, data from the  Office of National Statistics showed on Thursday .

Year on year, the Gross Domestic Product (GDP) was unrevised at 0.6 percent growth.

Data released by the ONS also showed exports have dropped 0.8 percent from 1.6 percent, beating expectations of 1.0 percent decrease.

Imports, on the other hand, also advanced to 0.5 percent drop from 1.0 percent drop, also beating analyst’s forecasted drop of 0.9 percent.

In fact, the drop in exports reflect the weak demand from the euro area, UK’s main trading partner, and worldwide in addition to the strengthening sterling in the first quarter.

Gross fixed capital formation plummeted 0.8 percent from 0.2 percent decline in the first quarter of 2013, missing forecasts of 0.3 percent. Private consumption retreated to 0.1 percent from 0.4 percent, analysts called for 0.3 percent.

Government spending was flat at 0.0 percent from 0.6 percent in the fourth quarter of 2012, missing median forecasts of 0.2 percent.

EU leaders continue to push through to tackle major issues in the region that suffers still from anemic growth and uncertain outlook as the euro area debt crisis takes a toll on the region’s entire 27 economy. The EU summit on Wednesday focused on tax evasion and means to improve the taxation system.

According to statistics, tax evasion and avoidance cost for the EU 27 is nearly 1 trillion euros a year. A European Parliament resolution on tax evasion Tuesday urged the leaders to halve the trillion annual losses by 2020 by curbing the loopholes and havens.

The EU leaders stressed on the need to tackle tax evasion and at the same time push for global action against bank secrecy; the key is also to prevent firms from taking advantage of loopholes to avoid taxes.

Leaders of the largest EU nations, Britain, Germany and France, called, during their summit on Wednesday, for  tighter regulations and rules to stop major companies from aggressively avoiding taxes such as Google, Apple and Amazon.

The most recent case is Apple as a Senate report found that the giant tech company had paid only 2% tax on $74 billion in overseas income by exploiting a loophole in the tax code in Ireland, a high revenue stream for austerity hit Europe that might help be part of the solution to the fiscal imbalances in the region!

Also another Senate report said that the British unit of Amazon paid only $3.7 million tax on 2012 sales of $6.5 billion which is a major concern for British Prime Minister David Cameron that has placed the tax issue on the top of the agenda for the G8 meeting in Ireland in June.

The president of the European council, Herman Van Rompuy, said that there was “strong political will” in Europe to make the tax systems fairer. He said that the economic hardship added new momentum to the debate on fair taxation but still added that the EU is not seeking tax harmonization across the EU 27.

"It`s a real breakthrough... I am really convinced there is a strong political will by leaders not just on the European level, but on the global level, to tackle tax fraud," he told a news conference.