- Yen receding as Japanese political scandal shifts market sentiment.
- Broad markets are hunkering down for the US CPI data at 12:30 GMT.
The EUR/JPY pair has stretched to reach into the 131.40 area ahead of the European markets session as the Yen walks back amidst ongoing political shots in Japan.
Risk-based assets kicked off the week on a high note with equities continuing to rally off of upbeat jobs figures from the US on Friday, and the Yen entered the early Tuesday session with buyers trying to prop up the JPY in spite of political tensions arising from the current land sale scandal encircling the Japanese Prime Minister Shinzo Abe and Finance Minister Taro Aso, but the mood has shifted and the floor seems to be disappearing under the Yen, and the Yen is falling softly.
Adding fuel to the fear fire is the US CPI due at 12:30 GMT today; despite lagging real wage growth in Friday's NFP report cooling inflation fears across markets, those fears could surge all over again if the US CPI posts a bigger gain than markets were expecting.
The Euro's mood has been largely spoiled by Trump's tariffs sparking fears of a trade war ensuing between the US and the European Union (EU), and the potential for retaliation from the EU is keeping the EUR on the downside.
The pair has been nailed to the 200-day SMA since late February after declining from an early-February high of 137.50, and H4 charts are generally listless, with support from the last swing low at 130.50 and last week's low of 129.35, with resistance at last week's repeated highs at 131.85 and the 34-day EMA, sitting at 132.35.
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