EUR/JPY reverses BOJ-inspired gains, plunges to near 139.50 on BOJ’s unchanged policy
- EUR/JPY has surrendered its gains and has slipped to near 139.50.
- The BOJ has announced an unchanged interest rate policy to keep liquidity injection intact.
- Eurozone HICP is seen stable at 8.1% on an annual basis.
The EUR/JPY pair touched a high of 141.73 swiftly, reversed its gains with an equal opposite reaction, and plunged to near 139.50. The Bank of Japan (BOJ) has maintained its status quo and has announced no change in its policy stance. The announcement has remained in line with the estimates as the BOJ has kept its interest rates flat at -0.1%.
Considering its oil-contaminated 2% inflation rate, a continuation of an ultra-loose monetary policy was expected by the market participants. The economy achieved its inflation targets, however, the majority of the price pressures were contributed by costly fossil fuels. The BOJ will keep on flushing helicopter money into the Japanese economy in order to spurt the growth forecasts.
It is worth noting that the Japanese economy has yet not achieved its pre-pandemic growth levels. Therefore, the BOJ is keeping on restricting its yields at 0.25% to accelerate its exports swiftly.
On the eurozone front, the shared currency bulls are awaiting the release of the Harmonized Index of Consumer Prices (HICP). An annual HICP figure is expected to remain stable at 8.1%. Also, the core HICP that excludes food, energy, alcohol, and tobacco is seen unchanged at 3.8%.
Author
Sagar Dua
FXStreet
Sagar Dua is associated with the financial markets from his college days. Along with pursuing post-graduation in Commerce in 2014, he started his markets training with chart analysis.
