currently the default charset is ISO-8859-1, but this is not consistent with the rest of the java platform. Charset uses:

 public static Charset defaultCharset() {
synchronized (Charset.class) {
if (defaultCharset == null) {
java.security.PrivilegedAction pa =
new GetPropertyAction("file.encoding");
String csn = (String)AccessController.doPrivileged(pa);
Charset cs = lookup(csn);
if (cs != null)
return cs;
return forName("UTF-8");
}
return defaultCharset;
}
    }

this method is only available in java 1.5, but is consistent with the behavior of methods like String.getBytes() and OutputStreamWriter, which are in earlier versions.