EUR/JPY continues to move higher, and if this continues, the Bank of Japan may intervene.
EUR/JPY: Weekly chart
After a strong rally in June and July, the price of EUR/JPY is currently trading at 158.30. The first support is 155.50.
During Tuesday’s session, the yen needs to keep an eye on unemployment data, but analysts expect the unemployment rate to remain at 2.5%.
German consumer confidence data will be released during the European session on Tuesday. The figure is expected to be flat, but if the numbers are strong, the euro could rise further.
ECB President Christine Lagarde declined to give any clues as to whether the ECB should raise rates for the tenth consecutive time next month. Some of her hawkish colleagues have struggled to highlight the possibility of another rate hike.
In an interview with Bloomberg during the central bank meeting in Jackson Hole, Wyoming, Lagarde said: “It is critical that inflation expectations remain at 2%. Policymakers often use the event to make major announcements.
But Lagarde’s restraint has received attention this year, as the lack of rate hikes has hurt the economy. Germany, Europe’s largest economy, is in recession, with dismal economic data from the Eurozone-20 last week.
Despite the weak economy, the rise in euro interest rates has weighed on the yen, and the Bank of Japan is likely to act as it did in 2022. The bottom line of the dollar is considered to be 150.
The central bank declined to comment on the euro, but traders should pay close attention to the pair’s movements.
Germany’s latest inflation data will be released on Wednesday, and analysts expect prices to fall slightly. The country will release employment data on Thursday, followed by inflation data in the eurozone. In addition, the ECB will also publish the minutes of its latest meeting.