Ella 
EUR/JPY fell for the third consecutive day during early European trading on Friday, trading around 169.78. The pair remained under selling pressure following weak German retail sales data. Investors will shift their attention to the Eurozone’s preliminary Harmonized Index of Consumer Prices (HICP) for May, due later on Friday.
German retail sales in April 2024 came in below expectations on a monthly basis, the German Federal Statistical Office Destatis reported on Friday. German retail sales fell 1.2% on a monthly basis in April, compared with a 1.8% increase in March. Retail sales fell 0.6% year-on-year in April, compared with a 1.9% decline in March. The lackluster German data had little impact on the euro (EUR).
Traders reduced their bets that the European Central Bank (ECB) will start easing policy before other major central banks, with markets expecting the ECB to take more time to carefully consider inflation data. The Harmonized Index of Consumer Prices (HICP) is expected to increase by 2.5% year-on-year, up from 2.4% previously; the core harmonized inflation rate is expected to increase by 2.8%, up from 2.7% in April.
On the yen front, Japanese Finance Minister Shunichi Suzuki said on Friday that he would closely monitor foreign exchange (FX) movements and take all FX measures if necessary. The verbal intervention of Japanese authorities may support the yen (JPY) in the short term and limit the upside of the cross.
Nevertheless, Tokyo’s consumer price index (CPI) inflation rate rose to 2.2% in May from 1.8% in April. Meanwhile, Tokyo’s core CPI rose 1.9% year-on-year in May, compared with 1.6% in April, in line with market expectations. The data added to the uncertainty about the timing of the next rate hike by the Bank of Japan.
