EUR/JPY drops to 6-day lows near 124.50

The EUR/JPY pair came under a renewed selling pressure in the second half of the day and dropped to its lowest level since January 25 at 124.49. As of writing, the pair was losing 0.43% on the day at 124.55.

Jens Weidmann, President of the Deutsche Bundesbank and ECB board member, on Thursday said that the ECB's policy normalisation process would be slow and would likely to take several years to complete to weigh on the shared currency. Weigmann acknowledged the economic slowdown in Germany and stated that he was expecting the German economy to grow below 1.5% in 2019. 

Earlier today, the data published by the Eurostat showed that the GDP in the euro area expanded by 1.2% and 0.2% on a yearly and quarterly basis, respectively, in the fourth quarter to match analysts' estimates. Furthermore, the unemployment rate remained unchanged at 7.9% in December as expected. 

Although Weidmann's comments forced the pair to lose its traction, strong gains witnessed in the S&P 500 and the Nasdaq Composite indexes in the U.S. pointed out to improved market sentiment in the NA session and made it difficult for the JPY to preserve its strength.

On Friday, the Eurostat will release its inflation report, which is expected to show the annual CPI to edge down to 1.4% in January from 1.6% in December. A lower-than-expected increase in the CPI could cause the shared currency to weaken against its major rivals as it would confirm Weidmann's cautious tone.

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