Anna 
During the early European session on Monday, the EUR/JPY cross maintains its position above the 163.00 mark, benefiting from a prevailing risk-on environment in the market. The Euro (EUR) receives support, creating a favorable backdrop for the EUR/JPY cross. However, potential shifts in the Bank of Japan’s (BoJ) monetary policy stance may limit further losses of the Japanese Yen (JPY). At the current press time, EUR/JPY is trading at 163.15, representing a 0.26% gain for the day.
Speculation is growing that the BoJ might alter its monetary policy trajectory, potentially boosting the Japanese Yen (JPY). BoJ policymaker Hajime Takata has hinted at an exit from the ultra-loose monetary policy, indicating progress toward achieving the 2% inflation target. Additionally, reports from the Kyodo News agency suggest that the Japanese government is contemplating announcing an end to deflation, signaling increased risks of policy tightening.
On the Euro front, the European Central Bank (ECB) is expected to maintain interest rates steady at its March meeting on Thursday. ECB policymakers are keen on obtaining additional evidence that recent declines in inflation will be sustained. Minutes from the ECB’s January meeting emphasized the need for continuity, caution, and patience. Ongoing geopolitical tensions in the Middle East raise concerns that inflation could rebound, potentially delaying speculation about rate cuts from the ECB.
Market participants are closely monitoring the Japanese Consumer Price Index (CPI) for February, scheduled for release on Tuesday. On Wednesday, attention will shift to Eurozone Retail Sales data. The highlight of the week is the ECB interest rate decision and Press Conference on Thursday. Traders will seek cues from this data and events, exploring potential trading opportunities around the EUR/JPY cross amidst evolving market dynamics.
