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EUR/JPY has sensed selling pressure around 139.50 as the German energy crisis deepens.
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Two leaks have been detected in the Nord Stream 1 pipeline.
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The impact of BOJ’s unscheduled bond-buying program has started fading away.
The EUR/JPY pair has faced firmer barricades around 139.50 in the European session. A modest advancement towards the intraday high at around 139.50 has terminated now and the yen bulls are taking over the driving seat. The cross may phase out its entire losses and will test Monday's low at 137.36.
The shared currency bulls have picked significant offers as Denmark's Energy Minister has confirmed two Leaks on Nord Stream 1 pipeline. This is going to mark more dents on the energy inventories in an already vulnerable German energy market. The German energy market is going through weak energy stockpiles after Russia cut off energy supplies from Nord Stream 1 pipeline under the Baltic Sea. Apart from that, the upcoming demand from the winter season is making the energy crisis much worse.
In today’s session, investors will focus on the speech from European Central Bank (ECB) President Christine Lagarde. ECB policymaker is expected to dictate the likely monetary policy action to combat the galloping inflation.
Meanwhile, comments from ECB’s Chief Economist Philip Lane have also dampened the sentiment of Eurozone investors. ECB’s Lane has warned of a decline in corporate profits and a drop in wages in the fight against galloping inflation. However, the inflation rate will start decreasing significantly in 2023, with further decreases in 2024.
On the Tokyo front, the Bank of Japan (BOJ) announced an unscheduled bond-buying program. The central bank is offering to buy JPY 250 billion worth of Japanese Government Bonds (JGBs). The announcement weakened the yen bulls in the Asian session, however, the impact is getting faded now.
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