The EUR/JPY cross attracts sellers for the second successive day on Wednesday and drops to the 158.20 area, or its lowest level since August 5 during the Asian session. Spot prices, however, manage to recover a few pips in the last hour and currently trade around the mid-158.00s, still down nearly 0.30% for the day amid some follow-through buying around the Japanese Yen (JPY).
Investors turn cautious ahead of the release of the crucial US consumer inflation figures later this Wednesday, which will play a key role in influencing expectations about the Federal Reserve's (Fed) rate-cut path. This is evident from a generally weaker tone around the equity markets and drives some haven flows towards the JPY. Adding to this, hawkish remarks by Bank of Japan (BoJ) board member Junko Nagakawa provide an additional boost to the JPY and exert downward pressure on the EUR/JPY cross.
Nagakawa noted that even after the July rate hike, real interest rates remain deeply negative, and accommodative monetary conditions are maintained. She added that the BoJ is likely to adjust the degree of monetary easing if the economy and prices move in line with its projection. In contrast, the European Central Bank (ECB) is almost certain to lower rates again at its September meeting on Thursday amid declining inflation in the Eurozone. This further contributes to the offered tone surrounding the EUR/JPY cross.
The JPY bulls, meanwhile, seem rather unaffected by a Reuters monthly poll, which showed that business confidence at big Japanese manufacturers sank to a seven-month low of 4 in September, down sharply from 10 in the previous month. Adding to this, the mood at non-manufacturers fell for a third consecutive month, to a one-year-low, suggesting a gloomy sentiment. This, however, does little to lend any support to the EUR/JPY cross, suggesting that the near-term bias remains tilted firmly in favor of bearish traders.
The table below shows the percentage change of Japanese Yen (JPY) against listed major currencies today. Japanese Yen was the strongest against the New Zealand Dollar.
USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
---|---|---|---|---|---|---|---|---|
USD | -0.11% | -0.04% | -0.41% | -0.01% | 0.04% | 0.11% | -0.21% | |
EUR | 0.11% | 0.07% | -0.30% | 0.12% | 0.20% | 0.22% | -0.09% | |
GBP | 0.04% | -0.07% | -0.37% | 0.04% | 0.07% | 0.15% | -0.16% | |
JPY | 0.41% | 0.30% | 0.37% | 0.40% | 0.43% | 0.49% | 0.19% | |
CAD | 0.00% | -0.12% | -0.04% | -0.40% | 0.04% | 0.12% | -0.20% | |
AUD | -0.04% | -0.20% | -0.07% | -0.43% | -0.04% | 0.01% | -0.22% | |
NZD | -0.11% | -0.22% | -0.15% | -0.49% | -0.12% | -0.01% | -0.30% | |
CHF | 0.21% | 0.09% | 0.16% | -0.19% | 0.20% | 0.22% | 0.30% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Japanese Yen from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent JPY (base)/USD (quote).