EUR/JPY holds steady around 173.00, remains below one-month low ahead of Eurozone GDP

• EUR/JPY retains its positive bias amid bets that the ECB will keep rates unchanged in the near term.
• The upbeat domestic data and trade optimism underpin the JPY, capping the upside for spot prices.
• Traders now look forward to the revised Eurozone Q2 GDP print to grab short-term opportunities.

The EUR/JPY cross edges higher during the Asian session on Friday, though it lacks follow-through buying and remains below a one-month high touched earlier this week. Nevertheless, spot prices seem poised to end in the green for the first time in three week and currently trade just below the 173.00 round-figure mark.

Data released this week showed that Eurozone inflation edged up in August and stayed close to the European Central Bank's (ECB) 2% target. This firms up market expectations that the central bank is done lowering interest rates, which continues to act as a tailwind for the shared currency and offers support to the EUR/JPY cross.

ECB board member Isabel Schnabel said on Tuesday that the policy is already mildly accommodative and added that that she does not see a reason for a further rate cut. Separately, ECB Governing Council member Gediminas Šimkus said that there is no reason to adjust rates now. Adding to this, a softer US Dollar (USD) benefits the Euro.

The Japanese Yen (JPY), on the other hand, draws some support from the upbeat domestic data, which showed that real wages turned positive for the first time in seven months. Moreover, a rise in Japan's household spending in July, though at a slower pace, suggests that the Bank of Japan (BoJ) will stick to its policy normalization path.

Meanwhile, US President Donald Trump signed an executive order on Thursday to lower the Japanese auto import tariff. This further underpins the JPY and holds back traders from placing aggressive bullish bets around the EUR/JPY cross. Next on tap is the release of the revised Eurozone Q2 GDP print, which might provide some impetus.