EUR/JPY is extending three-day winning streak on speculation Japan may cut economic view


  • EUR/JPY is flashing green for the fourth straight day on speculation Japan may downgrade economic assessment. 
  • The Bank of Japan is expected to maintain the status quo in all categories of monetary policy.

EUR/JPY closed in the green for a third consecutive day on Thursday - its biggest daily winning streak since November - and is currently trading at 126.47 - up 0.20 percent on the day. 

The anti-risk JPY took a hit yesterday and is being offered at press time, possibly on reports stating that Japan's government is considering a slight downgrade to its assessment of the economy in its monthly report for March. After all, the weak external sector (China slowdown) is hurting Japanese exports and factory orders. 

With markets pricing a potential downgrade of economic assessment in advance, the EUR/JPY pair could see "sell-the-fact" trade if the wording matches market expectations. That said, JPY selling would gather pace if the monthly report uses strong words to indicate downgrade. 

As for the next few hours, the focus is on the Bank of Japan's (BOJ) rate decision. The central bank is expected to keep key policy tools unchanged. The meeting doesn't include an outlook report so it's likely to be mostly a non-event, according to Danske Bank. 

Technical Levels

    1. R3 127.28
    2. R2 126.93
    3. R1 126.6
  1. PP 126.24
    1. S1 125.91
    2. S2 125.56
    3. S3 125.23

 

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