- EUR/JPY snaps its losing streak after dovish remarks from Japanese minister.
- Japan’s Finance Minister Suzuki indicated that the present moment is not conducive to tightening monetary policy.
- The Euro strengthens in response to the ECB’s commitment to uphold strict policy measures aimed at achieving its inflation target.
EUR/JPY edges higher to 161.40 during the Asian trading hours on Tuesday, halting its five-day losing streak. The Japanese Yen (JPY) encounters downward pressure following remarks made by Japan’s Finance Minister Shunichi Suzuki, who suggested that now is not the appropriate time for the Bank of Japan (BoJ) to tighten monetary policy. This dynamic provides support for the EUR/JPY cross.
Furthermore, Bank of Japan (BoJ) Governor Kazuo Ueda stated in his parliamentary speech on Tuesday, “When the achievement of a 2% inflation target is within reach in a stable and sustainable manner, we will consider exiting from negative interest rates. If inflation accelerates and necessitates monetary tightening, we may raise interest rates without reducing the BoJ’s bond holdings.”
On the other side, Christine Lagarde, the President of the European Central Bank (ECB), has adopted a prudent stance, stressing the importance of gathering further evidence before considering any adjustments to interest rates. The ECB has opted to retain its current monetary policy, reaffirming its commitment to steering inflation back to its desired levels.
The ECB has clearly stated its intention to maintain appropriately stringent policy measures for as long as necessary to achieve its inflation target. The positive sentiment surrounding the ECB could potentially strengthen the Euro, thereby providing support for the EUR/JPY cross. Investors are expected to closely monitor the release of Germany’s Consumer Price Index (CPI) data scheduled for Tuesday.
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