Ella 
In the Asian market on Friday, EUR/JPY rose to its highest level since 2008, 167.20, thanks to the decline of the yen after the announcement of the Bank of Japan’s interest rate decision.
Bank of Japan board members decided to keep key interest rates unchanged at 0% at their April meeting, in line with broad market expectations. The central bank raised interest rates for the first time since 2007 at its March meeting, ending an era of negative interest rates that began in 2016.
In addition, the Bank of Japan provided a new outlook, predicting that inflation will remain close to the 2% target for the next three years, indicating that the central bank is prepared to raise lending rates at the end of this year. The central bank also said it would continue to buy government bonds, setting guidance in March to buy 6 trillion yen ($38.45 billion) per month. Following the meeting, the yen attracted some short sellers against the euro.
The recently released Tokyo Consumer Price Index (CPI) fell sharply in April. The Statistics Bureau of Japan released a report on Friday saying that the Tokyo Consumer Price Index (CPI) rose by 1.8% year-on-year in April, compared with the previous increase of 2.6%. Meanwhile, Tokyo’s consumer price index, excluding fresh food and energy, rose 1.8% year-on-year, compared with expectations for a 2.7% increase and the previous reading of 2.9%. Weaker inflation in Tokyo also weighed on the safe-haven yen.
In the euro, European Central Bank (ECB) policymaker Joachim Nagel said on Wednesday that he favors an interest rate cut in June, adding that it would not necessarily be followed by a series of rate cuts. ECB official Fabio Panetta said a small interest rate cut would prevent the risk of prolonged stagnation in the euro zone economy.
