EUR/JPY rebounds to near 160.60 as Japan's economy returns to growth in fourth quarter


  • EUR/JPY could gain ground on growing speculation of BoJ lifting negative rates.
  • Japan’s GDP QoQ increased by 0.1% in the fourth quarter of 2023, against the previous decline of 0.1%.
  • Traders will observe ECB Lagarde’s remarks during the Eurogroup Meeting on Monday.

EUR/JPY recovers its intraday losses as the Japanese Yen (JPY) strengthened following Japan’s Gross Domestic Product (GDP) data showing Japan's economy returned to growth in the last quarter of 2023, thus turning away from a technical recession. The EUR/JPY cross attempts to rebound from weekly lows, trading around 160.60 during the early European trading hours on Monday.

Japan’s GDP quarter-on-quarter expanded by 0.1% in the fourth quarter of 2023, reversing the previous decline of 0.1% but falling short of the expected 0.3% growth. Meanwhile, the GDP Annualized figure showed a reading of 0.4% growth, below the market expectation of 1.1% and the previous decline of 0.4%. Consequently, Japan’s 2-year yield surged towards 0.20%, marking the highest level since 2011. Additionally, the 10-year government bond yield rose to near 0.75%.

These GDP figures have strengthened speculations that the Bank of Japan (BoJ) could commence raising interest rates soon. BoJ policymakers are reportedly inclined towards the notion of ending negative interest rates this month, driven by expectations of substantial pay hikes in the year's annual wage negotiations.

Last week, BoJ Governor Kazuo Ueda stated that it is "fully possible to seek an exit from stimulus while striving to achieve the 2% inflation target." Additionally, BoJ board member Junko Nakagawa recently commented that “prospects for the economy to achieve a positive cycle of inflation and wages are in sight."

On the other side, the European Central Bank (ECB) maintained borrowing costs at record levels last week, in line with expectations. ECB President Christine Lagarde adopted a cautious stance, stressing the need for further evidence before considering rate cuts. Market participants will closely watch Lagarde's remarks during the Eurogroup Meeting scheduled for Monday. Additionally, Consumer Price Index (CPI) data from Germany on Tuesday will likely attract attention from investors.

EUR/JPY

Overview
Today last price 160.64
Today Daily Change -0.19
Today Daily Change % -0.12
Today daily open 160.83
 
Trends
Daily SMA20 162.31
Daily SMA50 160.6
Daily SMA100 160.04
Daily SMA200 158.34
 
Levels
Previous Daily High 162.18
Previous Daily Low 160.62
Previous Weekly High 163.52
Previous Weekly Low 160.56
Previous Monthly High 163.72
Previous Monthly Low 158.08
Daily Fibonacci 38.2% 161.21
Daily Fibonacci 61.8% 161.58
Daily Pivot Point S1 160.24
Daily Pivot Point S2 159.65
Daily Pivot Point S3 158.68
Daily Pivot Point R1 161.8
Daily Pivot Point R2 162.77
Daily Pivot Point R3 163.36

 

 

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