Ella 
EUR/JPY was trading in negative territory around 160.70 during early European trading on Monday. Hawkish comments from Bank of Japan (BOJ) Governor Kazuo Ueda provided some support to the Japanese yen (JPY) and weighed on the cross. The Eurozone Harmonized Index of Consumer Prices (HICP) flash report for August will be in focus on Friday.
Bank of Japan Governor Kazuo Ueda reiterated on Friday that he would raise interest rates if inflation can continue to reach the 2% target. A Reuters poll showed that most economists expect the Bank of Japan to raise interest rates again this year, but more people think the increase may occur in December rather than October. Growing speculation that the Bank of Japan will raise interest rates further has boosted the yen against the euro.
In the euro, investors are awaiting preliminary readings on inflation for August. This may provide some hints for the European Central Bank’s (ECB) interest rate decision in September. The consensus is that inflation will fall to 2.3% in August, prompting the ECB to continue cutting interest rates throughout the rest of the year. This, in turn, has put some selling pressure on the common currency.
ECB Governing Council member Olli Rehn said on Friday that slowing inflation and a weakening euro zone economy strengthened the case for cutting borrowing costs next month.
