EUR/JPY Faces Selling Pressure Near Support Level

During the early European trading hours on Friday, the EUR/JPY cross encountered selling pressure above the 161.00 support level. The cautious sentiment prevailing in the market provided some support to the Japanese Yen (JPY) against the Euro (EUR). However, the diminished expectations that the Bank of Japan (BoJ) will imminently abandon its negative interest rate policy may limit the upside potential for the cross.

Market participants are eagerly awaiting the upcoming Bank of Japan (BoJ) interest rate decision for fresh catalysts. The current trading level of the cross stands near 161.15, representing a marginal decline of 0.05% on the day.

The uncertainty surrounding the Bank of Japan’s next policy decision is expected to weaken the JPY, creating headwinds for the EUR/JPY cross. BoJ Governor Kazuo Ueda suggested that policymakers will deliberate on whether the economic outlook warrants phasing out the massive monetary stimulus. However, rising geopolitical tensions in Europe could counterbalance this effect by boosting safe-haven flows, thus benefiting the JPY. Reports on Friday indicated that Russia has relocated tactical nuclear weapons closer to NATO territory, escalating tensions.

On the Euro front, statements from European Central Bank (ECB) officials suggest a cautious approach. ECB Chief Economist Philip Lane emphasized the need for time to assess inflationary pressures accurately, while ECB President Christine Lagarde hinted that the first-rate cuts are more likely to occur in June rather than April, during the March meeting.

Looking ahead, the release of the February Consumer Price Index (CPI) from France and Italy later on Friday is not expected to significantly impact the market sentiment, as traders await the BoJ monetary policy meeting next week. The outcome of the BoJ rate decision could provide a clearer direction for the EUR/JPY cross in the near term.

EUR latest articles

Popular exchange rates

foreign exchange

fxcurrencyconverter is a forex portal. The main columns are exchange rate, knowledge, news, currency and so on.

© 2023 Copyright fxcurrencyconverter.com