The EUR/JPY cross advanced to 156.65 during Monday’s Asian trading session, buoyed by renewed Euro (EUR) demand following a proposal by France and the UK for a one-month truce in Ukraine. Investors now await key economic data releases, including the Eurozone Harmonized Index of Consumer Prices (HICP) and the US ISM Manufacturing PMI, both due later in the day.
Geopolitical Developments Lift Euro Sentiment
French President Emmanuel Macron announced late Sunday that France and the UK had proposed a temporary ceasefire in Ukraine, halting air and sea attacks as well as strikes on energy infrastructure. The initiative follows crisis discussions in London, where European leaders committed to bolstering security spending and forming a coalition to safeguard any potential truce. The move supported the Euro as markets welcomed the diplomatic efforts.
Japanese Yen Remains Supported by Economic Strength
On the other hand, the Japanese Yen (JPY) retained some strength following solid domestic economic data. The Jibun Bank Japan Manufacturing Purchasing Managers’ Index (PMI) rose to 50.8 in February, surpassing the 48.9 flash estimate and marking the shallowest contraction in three months. Persistently high inflation and steady growth reaffirm expectations that the Bank of Japan (BoJ) could raise interest rates further in the near term, lending support to the Yen.
Market Focus on Economic Data
Investors are closely watching the Eurozone’s preliminary HICP inflation report and the US ISM Manufacturing PMI for fresh trading cues. Positive inflation data from the Eurozone could reinforce the European Central Bank’s (ECB) hawkish stance, potentially lifting the EUR further against the JPY.
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