EUR/JPY trims a part of intraday gains, up a little around 157.00 ahead of ECB decision

Source Fxstreet
  • EUR/JPY builds on the overnight recovery from a one-month low amid a modest JPY weakness.
  • An unexpected fall in Japan’s PPI, along with a positive risk tone, undermines the safe-haven JPY.
  • Bets for another BoJ rate hike in 2024 should cap the cross ahead of the key ECB policy decision.

The EUR/JPY cross gains some positive traction on Thursday and recovers further from over a one-month low, around the 155.45 region touched the previous day. Spot prices, however, retreat a few pips from the daily peak and currently trade around the 157.00 mark as investors look to the European Central Bank (ECB) interest rate decision for a fresh impetus.

The ECB is widely expected to announce a 25 basis points (bps) rate cut at the end of its September policy meeting, marking the second adjustment in its current policy easing cycle. The market focus, however, will remain glued to the updated economic projections and the forward guidance. Apart from this, ECB President Christine Lagarde's comments at the post-meeting press conference will influence the shared currency and determine the near-term trajectory for the EUR/JPY cross. 

Heading into the key central bank event risk, a soft reading on Japan's Producer Price Index (PPI) undermined hawkish signals from the Bank of Japan (BoJ) and prompted some selling around the Japanese Yen (JPY). In fact, the headline PPI declined by 0.2% in August and the yearly rate decelerated more-than-anticipated, to 2.5% from 3.0% in July. This, along with a generally positive tone around the equity markets, dents demand for the safe-haven JPY and lends support to the EUR/JPY cross. 

That said, comments by Bank of Japan (BoJ) board member Naoki Tamura, saying that the path towards ending the easy policy is still very long, reaffirms bets that the central bank will raise borrowing costs further by the end of this year. This marks a big divergence in comparison to a dovish stance adopted by the ECB, which should limit the JPY losses. Hence, it will be prudent to wait for strong follow-through buying before confirming that the EUR/JPY cross has bottomed out.

Economic Indicator

ECB Press Conference

Following the European Central Bank’s (ECB) economic policy decision, the ECB President gives a press conference regarding monetary policy. The president’s comments may influence the volatility of the Euro (EUR) and determine a short-term positive or negative trend. If the president adopts a hawkish tone it is considered bullish for the EUR, whereas if the tone is dovish the result is usually bearish for the Euro.

Read more.

Next release: Thu Sep 12, 2024 12:45

Frequency: Irregular

Consensus: -

Previous: -

Source: European Central Bank

 

Disclaimer: For information purposes only. Past performance is not indicative of future results.
placeholder
WTI Crude Oil Price Forecast: Could Oil Return Above $100 as US-Iran Conflict Escalates Further?As of the Asian session on September 8, WTI crude oil prices (USOIL) continued to fluctuate at high levels, with the latest price trading higher near $92.30, up 1.2% on the day after touc
Author  TradingKey
8 hours ago
As of the Asian session on September 8, WTI crude oil prices (USOIL) continued to fluctuate at high levels, with the latest price trading higher near $92.30, up 1.2% on the day after touc
placeholder
AUD/USD climbs for a fourth day to 0.7218 as Fed-hike bets fail to lift the dollar; RBA speakers and US CPI now in focusThe Australian dollar has risen for four straight sessions toward 0.72 even after August nonfarm payrolls far exceeded expectations and pushed September Fed-hike odds to 58.4%. A thin, holiday-thinned dollar is the short-term driver; Westpac confidence and RBA speakers today, US PPI/CPI this week and the Sept 15-16 FOMC will decide whether the rally holds.
Author  Irene Q.
11 hours ago
The Australian dollar has risen for four straight sessions toward 0.72 even after August nonfarm payrolls far exceeded expectations and pushed September Fed-hike odds to 58.4%. A thin, holiday-thinned dollar is the short-term driver; Westpac confidence and RBA speakers today, US PPI/CPI this week and the Sept 15-16 FOMC will decide whether the rally holds.
placeholder
Japanese Yen rallies to February 18 high as upbeat wage data and GDP lift BoJ hike betsThe USD/JPY pair declines for the second straight day – also marking the fourth day of a fall in the previous five – and sinks to its lowest level since February 18, around mid-153.00s during the Asian session on Tuesday.
Author  FXStreet
17 hours ago
The USD/JPY pair declines for the second straight day – also marking the fourth day of a fall in the previous five – and sinks to its lowest level since February 18, around mid-153.00s during the Asian session on Tuesday.
placeholder
Crude Oil Price Forecast: Escalating US-Iran Tanker Attacks and Strait of Hormuz Risks Push Brent to $120? International oil prices continued to climb on Monday, extending their strong performance from the previous week.As military confrontations between the U.S. and Iran heat up again in and
Author  TradingKey
Yesterday 10: 35
International oil prices continued to climb on Monday, extending their strong performance from the previous week.As military confrontations between the U.S. and Iran heat up again in and
placeholder
Hot August jobs report reignites Fed-hike bets; S&P 500 slips below 7,700 — what to watch before the September FOMCAugust nonfarm payrolls surged to 162,000, three times the consensus, pushing CME FedWatch odds of a September 25-bp hike to 58.4% and dragging the S&P 500 below 7,700. CPI, PPI and the Sept 15-16 FOMC decision now set the tone for US stocks.
Author  Irene Q.
Yesterday 06: 42
August nonfarm payrolls surged to 162,000, three times the consensus, pushing CME FedWatch odds of a September 25-bp hike to 58.4% and dragging the S&P 500 below 7,700. CPI, PPI and the Sept 15-16 FOMC decision now set the tone for US stocks.
Related Instrument
goTop
quote