- EUR/JPY remains pressured around 13-day low on the way to second weekly loss.
- Covid woes in Japan, chatters over no tapering at ECB weigh on the quote of late.
- Market sentiment remains subdued amid a light calendar following mixed prints of second-tier Japan data.
- ECB decision will be the key, confirmation of easy money policies could keep bears hopeful.
EUR/JPY remains on the back foot for the fifth consecutive day, down 0.05% around 130.50, as markets in Tokyo open for Thursday’s trading. The cross-currency pair recently dropped on Bloomberg news suggesting no threats to the European Central Bank’s (ECB) easy money policy. Also weighing on the quote are coronavirus (COVID-19) woes and indecision over the economic trajectory as well as the key central bankers’ future actions.
Ahead of today’s special ECB meeting, Bloomberg spots anonymous officials familiar with the matter to confirm an upwardly revised 2.0% inflation target and policymakers’ readiness to accept the overshoot. The same rules out any hints suggesting the policy adjustments, largely backed by Germany and friends.
Read: ECB Official: Policymakers agree to raise inflation goal to 2% and allow overshoot – Bloomberg
Additionally, Japan aims to hold Olympics with no spectators amid the covid resurgence. “The Tokyo metropolitan government reported 920 new coronavirus cases Wednesday, marking the highest daily figure since May, amid a resurgence of infections with less than three weeks to go until the start of the Olympics,” said Kyodo News.
On the contrary, the FOMC minutes ruled out any immediate threat to the monetary policy, despite accepting upside risk to inflation, which in turn kept market sentiment positive.
Amid these plays, S&P 500 Futures struggle for a clear direction near the record top whereas the US 10-year Treasury yields stay depressed around the lowest since late February.
It should be noted that the recently released Japan Current Account for May rose past ¥1820.4B to ¥1979.7 B. However, the Trade Balance BOP Basis dropped below ¥289.5 B previous readout during the stated month.
Looking forward, EUR/JPY traders will keep their eyes on the ECB announcements to confirm Bloomberg news, which if proved right could keep the bears on the driver’s seat.
Technical analysis
Sustained trading below 100-DMA, around 131.10, needs to conquer the 130.00 psychological magnet to keep EUR/JPY bears on the driver’s seat.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD edges lower toward 1.0700 post-US PCE
EUR/USD stays under modest bearish pressure but manages to hold above 1.0700 in the American session on Friday. The US Dollar (USD) gathers strength against its rivals after the stronger-than-forecast PCE inflation data, not allowing the pair to gain traction.
GBP/USD retreats to 1.2500 on renewed USD strength
GBP/USD lost its traction and turned negative on the day near 1.2500. Following the stronger-than-expected PCE inflation readings from the US, the USD stays resilient and makes it difficult for the pair to gather recovery momentum.
Gold struggles to hold above $2,350 following US inflation
Gold turned south and declined toward $2,340, erasing a large portion of its daily gains, as the USD benefited from PCE inflation data. The benchmark 10-year US yield, however, stays in negative territory and helps XAU/USD limit its losses.
Bitcoin Weekly Forecast: BTC’s next breakout could propel it to $80,000 Premium
Bitcoin’s recent price consolidation could be nearing its end as technical indicators and on-chain metrics suggest a potential upward breakout. However, this move would not be straightforward and could punish impatient investors.
Week ahead – Hawkish risk as Fed and NFP on tap, Eurozone data eyed too
Fed meets on Wednesday as US inflation stays elevated. Will Friday’s jobs report bring relief or more angst for the markets? Eurozone flash GDP and CPI numbers in focus for the Euro.