Ella 
During Monday’s Asian trading session, EUR/JPY strengthened around 160.60. A weaker Japanese yen (JPY) provides some support for this cross. Trading volumes are likely to be light for the remainder of the day as Japanese markets are closed for the Mountain Day holiday.
Data released by the German Federal Statistics Office (Destatis) on Friday showed that Germany’s Harmonized Index of Consumer Prices (HICP) increased by 2.6% year-on-year in July, consistent with the consensus and the previous value of 2.6%. The European Central Bank (ECB) is likely to cut interest rates two more times this year. However, ECB President Christine Lagarde said at a press conference that the issue of any measures in September was still undecided, while ECB policymaker Olli Rehn said, If policymakers are confident that inflation trends will slow in the near term, the central bank can continue to cut interest rates.
Meanwhile, the pair’s upside may be limited as escalating geopolitical tensions in the Middle East threaten to weigh on risk assets such as the euro (EUR). While Hamas has proposed a ceasefire implementation plan, the Israel Defense Forces (IDF) intercepted about 30 “projectiles” entering northern Israel from Lebanon early Monday, ABC News reported. Any signs of rising geopolitical risks could boost safe-haven assets such as the yen and be negative for EUR/JPY.
