EUR/JPY Consolidates Ahead of BoJ Meeting, Eurozone Data Supports Euro
EUR/JPY trades flat at the start of the week as both currencies await key events. While markets have already priced in the expected BoJ interest rate hike, upbeat Eurozone data provides support for the Euro.
Key Factors:
- BoJ Meeting: A potential interest rate increase from negative territory is widely anticipated but may not trigger sustained JPY buying due to limited expectations for further rate hikes.
- Eurozone Data: Positive trade surplus and in-line final inflation figures bolster the Euro, potentially offsetting the BoJ's impact on EUR/JPY.
- Inflation Outlook: Stubbornly high inflation in the Eurozone suggests the ECB may need to maintain higher interest rates for longer, supporting the Euro.
Technical Outlook:
- Consolidation: EUR/JPY lacks clear direction within a narrow range ahead of the BoJ decision and potential market reaction.
- BoJ Impact: The central bank's decision and forward guidance will determine the pair's short-term trajectory.