EUR/JPY trades higher after dovish comments from incoming Prime Minister Ishiba

Source Fxstreet
  • EUR/JPY trades higher after Ishiba comments suggest he may pressure BoJ to keep interest rates low. 
  • Gains for the pair may be limited by slower inflation data from the Eurozon’s leading economy Germany. 
  • The data adds to woes about the German economy sparked by a second profit warning from carmaker Volkswagen. 

EUR/JPY trades over half a percent higher on Monday, in the 159.60s, after dovish comments from Japan’s new incoming Prime Minister, Shigeru Ishiba gave the impression he would steer monetary policy to remain accommodative due to economic conditions. His statement suggests he may exert pressure on the Bank of Japan (BoJ) to keep interest rates at their current historic lows, despite the bank’s policy trajectory pointing higher. 

This leads the Euro (EUR) to appreciate above the Japanese Yen (JPY) and EUR/JPY to rise. However, the pair’s gains will be capped by negative data from the bloc’s largest economy, Germany, which points to an economic slowdown. The German Consumer Price Index (CPI) fell short of estimates on Monday, after rising 1.6% on a yearly basis in September from 1.9% in August, Destatis reported. 

The Harmonized Index of Consumer Prices in Germany, the European Central Bank's preferred gauge of inflation, also fell short of expectations rising by 1.8% on a yearly basis, down from 2.0% in August and below the market expectation of 1.9%. The disinflationary data makes it more likely the European Central Bank (ECB) will cut interest rates more aggressively, leading to a weaker Euro, since lower interest rates tend to encourage outflows of capital to where they can earn higher returns. 

The news comes after Volkswagen, Germany’s largest carmaker issued another profit warning on Friday due to increased competition, falling sales in the far east and conflict with worker’s unions. The car manufacturer slashed expectations for revenue, profit and cash flow due to waning demand for its cars, and expects to deliver fewer vehicles this year than in 2023 — its fourth annual sales slump in five years. It is the company’s second profit warning in three months, and adds to the general aire of malaise surrounding the German economy. 

Disclaimer: For information purposes only. Past performance is not indicative of future results.
placeholder
Gold rebounds above $4,350 as US Dollar, Treasury yields slipGold price (XAU/USD) rebounds from a nearly one-month low to around $4,385 during the early Asian session on Thursday. The precious metal edges higher as the ‌US Dollar (USD) and Treasury yields retreat from recent highs.
Author  FXStreet
Sep 03, Thu
Gold price (XAU/USD) rebounds from a nearly one-month low to around $4,385 during the early Asian session on Thursday. The precious metal edges higher as the ‌US Dollar (USD) and Treasury yields retreat from recent highs.
placeholder
Gold rebounds past $4,400 as rate-hike odds cool ahead of NFPGold is back above $4,400 after weak ADP data cut September rate-hike odds to ~58%. XAU/USD rebounded from Wednesday's $4,282 low; Friday's NFP is the next catalyst.
Author  Irene Q.
Sep 03, Thu
Gold is back above $4,400 after weak ADP data cut September rate-hike odds to ~58%. XAU/USD rebounded from Wednesday's $4,282 low; Friday's NFP is the next catalyst.
placeholder
Gold rebounds above $4,450 as Waller tempers Fed rate hike bets ahead US jobs dataGold price (XAU/USD) gains momentum to around $4,470 during the early Asian session on Friday. The precious metal extended its recovery as Federal Reserve (Fed) rate hike bets ease. All eyes will be on the US August Nonfarm Payrolls (NFP) report, which is due later on Friday. 
Author  FXStreet
Sep 04, Fri
Gold price (XAU/USD) gains momentum to around $4,470 during the early Asian session on Friday. The precious metal extended its recovery as Federal Reserve (Fed) rate hike bets ease. All eyes will be on the US August Nonfarm Payrolls (NFP) report, which is due later on Friday. 
placeholder
Yen hits one-month high on BOJ September-hike bets; AUD/JPY cracks support as carry unwindsUSD/JPY has tumbled from the 160 area to a one-month low near 155.2 in two sessions as Bank of Japan hike bets for the Sept 17-18 meeting intensify. AUD/JPY has broken below 112.7, flagging carry-trade stress. A test of 155.21 - and then 153 - is now in focus.
Author  Suzie
Sep 04, Fri
USD/JPY has tumbled from the 160 area to a one-month low near 155.2 in two sessions as Bank of Japan hike bets for the Sept 17-18 meeting intensify. AUD/JPY has broken below 112.7, flagging carry-trade stress. A test of 155.21 - and then 153 - is now in focus.
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.
3 hours ago
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