EUR/JPY advances to over two-week high, around mid-157.00s amid notable JPY supply – by hareshmenghani EURJPY BOJ Inflation ECB Currencies
tion for the second successive day on Tuesday. The momentum lifts spot prices to over a two-week high, around mid-157.00s during the Asian session and is sponsored by the heavily offered tone surrounding the Japanese Yen .
Data released earlier today showed that real wages in Japan fell for a 15th straight month in June and nominal pay growth also slowed, reaffirming expectations that the Bank of Japan will stick to its dovish stance. This, in turn, is seen weighing on the JPY and providing a goodish lift to the EUR/JPY cross. It is worth recalling that the Bank of Japan has emphasised that sustainable pay hikes is a prerequisite to consider exiting easy policies and dismantling its massive monetary stimulus.
Moreover, the BoJ's Summary of Opinions released on Monday revealed that policymakers backed the case for the need to patiently continue with the current monetary easing towards achieving the price stability target. This comes after the Japanese central bank intervened to cool the speed of the rise in the benchmark 10-year Japanese government bond yield, which shot to a fresh nine-year peak last Thursday, and continues to undermine the JPY, though a softer risk tone could help limit losses.
The aforementioned mixed fundamental backdrop makes it prudent to wait for sustained strength and acceptance beyond the 158.00 mark, or the highest level since September 2008 touched last month, before positioning for any further gains. Traders now look to the release of the final German CPI print, which might influence the shared currency. Apart from this, the broader market risk sentiment might contribute to producing short-term trading opportunities around the EUR/JPY cross.
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