Ella 
EUR/JPY traded firmer during Asian trading on Tuesday, trading above the mid-162.00 level. EUR/JPY moved higher, in line with market expectations, following the Bank of Japan’s (BoJ) decision to end the era of negative interest rates that began in 2016. As of press time, EUR/JPY was trading at 162.77, up 0.37% on the day.
After a two-day monetary policy meeting on Tuesday, the Bank of Japan decided to raise interest rates by 10 basis points (bps) from -0.1% to 0%, the first rate hike by the Bank of Japan since 2007. This decision is in line with market expectations. The Bank of Japan’s policy statement showed that given the current economic activity and price outlook, the Bank of Japan expects to maintain loose financial conditions for now. In response to the interest rate decision, the yen attracted some selling as hawkish policy was fully priced in by the market.
The European Central Bank (ECB) kept interest rates steady at its March meeting. However, ECB policymakers said they were making progress in controlling inflation and began discussing a timetable for cutting interest rates. European Central Bank President Pablo Hernandez de Cos said the central bank could start cutting interest rates in June if euro zone inflation continues to fall. ECB Governing Council member Klaas Knot pegged the first rate cut for June and predicted three more cuts this year.
