EUR/JPY holds below 164.00 amid BoJ intervention fears

• EUR/JPY trades on a softer note around 163.75 in Thursday’s early European session. 
• The verbal intervention from Japanese authorities provides some support to the JPY. 
• ECB’s Stoumaras said there is a growing consensus for a rate cut in June. 
• The German February Retail Sales data will be due later on Thursday. 

The EUR/JPY cross trades with a mild negative bias around 163.75 during the early European session on Thursday. The cross edges lower amid the fear of foreign exchange intervention from the Japanese authorities.  

On Thursday, Japan’s Chief Cabinet Secretary Yishimasa Hayashi said that he will not rule out any options against excessive foreign exchange moves and will closely watch it. This verbal intervention complied with top currency diplomat Masato Kanda statement that he will react to the disorderly FX moves. The fear of FX intervention from Japanese authorities might support the Japanese Yen (JPY) and limit the upside of the EUR/JPY cross in the near term. 

On the Euro front, the growing speculation that the European Central Bank (ECB) will cut the interest rate in June acts as a headwind for the Euro (EUR) against the JPY. On Tuesday, ECB official Yannis Stoumaras said that there is a higher chance for a June rate cut, while Bank of Italy Governor Fabio Panetta said on Monday that the ECB is moving towards an interest rate cut as inflation is easing rapidly and approaching the 2% target. 

Looking ahead, traders will monitor German Retail Sales data, which is estimated to drop 0.8% YoY in February. Also, the German Unemployment Change and Italian Producer Price Index (PPI) will be released. On Friday, market players will turn their focus to the Tokyo Consumer Price Index (CPI) for March. In the case of the stronger-than-expected data, this could lift the JPY against the EUR. 

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