- EUR/JPY is looking to scale above 143.00 for a fresh upside as hawkish ECB bets are intact.
- The absence of recession in the Eurozone economy might postpone the achievement of the 2% inflation target.
- The release of the BoJ minutes will provide a detailed explanation behind the stable monetary policy.
The EUR/JPY pair has gradually corrected below 143.00 in the Tokyo session. The cross is expected to resume its upside journey as the catastrophic collapse of the Silicon Valley Bank (SVB) has failed to fade the hawkish bets for the European Central Bank (ECB).
ECB President Christine Lagarde is expected to continue favoring a 50 basis point (bps) interest rate hike this week as the Eurozone economy looks set to avoid recession this year despite multiple headwinds.
A report from the Erste Bank Research team dictates “This Winter Interim Forecast lifts the outlook for growth and slightly lowers the inflation projections. Growth for 2022 is now estimated at 3.5% in the European Union (EU). Gross Domestic Product (GDP) is projected to expand by 0.8% in 2023 and 1.6% in 2024. Headline inflation is forecast to fall from 9.2% in 2022 to 6.4% in 2023 and 2.8% in 2024 in the EU.
Eurozone economic calendar will lack economic events this week, however, the release of the Industrial Production data could produce some power-pack events ahead.
As per the consensus, monthly Industrial Production (Jan) is expected to disclose an expansion by 0.5% against a contraction of 1.1% released earlier. Annual economic data is expected to scale higher by 0.2% vs. a contraction of 1.7% released in the same period a year ago.
On the Japanese Yen front, investors are keeping an eye on the release of the Bank of Japan (BoJ) monetary policy minutes. The release of the BoJ minutes will provide a detailed explanation behind the unchanged monetary policy by ex-BoJ Governor Haruhiko Kuroda and what is in the basket for novel BoJ Governor Kazuo Ueda.
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