- EUR/JPY gains ground as Japanese Yen struggles to maintain its strength.
- Japanese authorities could intervene in the markets to support the Yen.
- ECB’s Robert Holzmann would like to see more supportive data before initiating rate cuts in June.
EUR/JPY continues to advance for the second consecutive session, trading around 163.30 during the early European hours. Despite a modest uptick in the Japanese Yen (JPY) yesterday, it struggles to maintain its strength. Investors are cautious amid the possibility of Japanese authorities intervening in the markets to prevent a significant decline in the Yen.
This, coupled with a subdued risk sentiment, provides some support to the safe-haven JPY. However, the Bank of Japan's (BoJ) cautious stance on further policy tightening fails to inspire bullish sentiment or offer substantial momentum.
Japanese Finance Minister Shunichi Suzuki reiterated his caution regarding excessive exchange-rate volatility and reaffirmed authorities' readiness to take appropriate action. His remarks provided some backing to the Japanese Yen.
European Central Bank (ECB) policymaker Robert Holzmann stated in a Reuters interview on Wednesday, "I have no inherent objection to a rate cut in June, but I would like to see more supportive data before making a decision."
German inflation moderated slightly more than anticipated in March, reaching its lowest level in almost three years. The preliminary German Harmonized Index of Consumer Prices (HICP) increased by 0.6% month-on-month (MoM) in March, slightly below the forecasted 0.7% rise. The year-on-year rate of HICP climbed by 2.3%, falling short of the market consensus of 2.4%.
The softer inflation figures suggest that Germany edges closer to the European Central Bank's (ECB) target of 2%, leading to market expectations of a potential interest rate cut in the near future. Consequently, this exerts selling pressure on the Euro (EUR) and presents a headwind for the EUR/JPY cross. Investors are now awaiting the advanced Eurozone Harmonized Index of Consumer Prices data for March on Wednesday for further insights.
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 retreats toward 1.0850 on modest USD recovery
EUR/USD stays under modest bearish pressure and trades in negative territory at around 1.0850 after closing modestly lower on Thursday. In the absence of macroeconomic data releases, investors will continue to pay close attention to comments from Federal Reserve officials.
GBP/USD holds above 1.2650 following earlier decline
GBP/USD edges higher after falling to a daily low below 1.2650 in the European session on Friday. The US Dollar holds its ground following the selloff seen after April inflation data and makes it difficult for the pair to extend its rebound. Fed policymakers are scheduled to speak later in the day.
Gold climbs to multi-week highs above $2,400
Gold gathered bullish momentum and touched its highest level in nearly a month above $2,400. Although the benchmark 10-year US yield holds steady at around 4.4%, the cautious market stance supports XAU/USD heading into the weekend.
Chainlink social dominance hits six-month peak as LINK extends gains
-637336005550289133_XtraSmall.jpg)
Chainlink (LINK) social dominance increased sharply on Friday, exceeding levels seen in the past six months, along with the token’s price rally that started on Wednesday.
Week ahead: Flash PMIs, UK and Japan CPIs in focus – RBNZ to hold rates
After cool US CPI, attention shifts to UK and Japanese inflation. Flash PMIs will be watched too amid signs of a rebound in Europe. Fed to stay in the spotlight as plethora of speakers, minutes on tap.