In the early European trading hours on Thursday, the EUR/JPY cross continues its upward momentum for the third consecutive week, currently trading at 162.80, marking a 0.19% gain for the day. However, potential market intervention by Japanese authorities threatens to bolster the Japanese Yen (JPY) and limit the upside for the EUR/JPY cross.
Japanese Finance Minister Shunichi Suzuki and Bank of Japan (BoJ) Governor Kazuo Ueda issued a verbal intervention on Thursday, expressing their commitment to closely monitoring foreign exchange movements with a heightened sense of urgency. This verbal intervention raises the possibility of a temporary strengthening of the JPY. Additionally, ongoing geopolitical tensions in the Middle East may contribute to supporting safe-haven assets like the Japanese Yen.
On the European front, European Central Bank (ECB) Governing Council member Pierre Wunsch provided insights, stating that the ECB may not swiftly cut interest rates, contrary to market expectations of an April rate cut. Policymakers have hinted that a decision in June is more likely as additional data will be available by then.
Market watchers are keenly anticipating the preliminary HCOB PMI data from Germany and the Eurozone for February. Furthermore, the release of the Consumer Price Index (CPI) from Italy and the Eurozone will be crucial in gauging economic conditions. Looking ahead, Friday will see the publication of German Gross Domestic Product (GDP) for Q4, offering additional insights for traders to identify potential opportunities within the EUR/JPY cross.
Amidst these developments, market participants remain vigilant, assessing the impact of both verbal interventions and economic data releases on the EUR/JPY cross.
