EURJPY has been looking for support recently and has data from the German and Japanese economies ahead of the weekend.
EURJPY – Daily Chart
EURJPY has found support after a break below the 157-158 levels.
The first significant data release will be Germany’s preliminary inflation for December. The number released at 9pm HKT is expected to dip from last month’s 3.2%. Traders will assess the outlook for European rates from that number and consider the effects on the weak German economy.
On Friday, Japanese consumer confidence is released at 1pm HKT. The Japanese economy has had consumer confidence stuck around the same level since April or May. German retail sales will follow that at 3pm HKT, where traders will look for an improvement on last month’s -0.1%.
German consumer sentiment was expected to improve at the start of the new year. However, whether it starts a sustained recovery from a shallow level for Europe’s largest economy remains to be seen.
A rise in income expectations helped sentiment recently, according to a survey of around 2,000 consumers published by the GfK Institute and the Nuremberg Institute for Market Decisions (NIM).
“It remains to be seen whether the current rise is the beginning of a sustained recovery in consumer sentiment,” said Rolf Buerkl at the NIM. “Consumers are still apprehensive, he added. “Geopolitical crises and wars, sharply rising food prices, and discussions about the national budget for 2024 continue to cause uncertainty”.
The yen strengthened at the end of the year as investors looked ahead to a change in monetary policy from the Bank of Japan. This week’s earthquake in Japan will also likely add weakness to the yen as traders assess the economic impact and fear further aftershocks.