EUR/JPY approaches 160.00 amid broad-based Yen weakness
- The Euro has bounced higher favoured by generalised Yen weakness.
- The weak Eurozone Industrial production and German GDP data have been ignored.
- The BoJ is expected to maintain its ultra-loose policy at next week's meeting.
The Euro has resumed its brooder upside trend against a weaker Japanese Yen. Investors' hopes that the BoJ will keep its ultra-loose monetary policy unchanged next week have offset the impact of the downbeat Eurozone data, pushing the pair near one-month highs.
Earlier today, Eurozone data revealed that industrial production contracted for the third consecutive month in November. Beyond that German GDP contracted at a 0.3% rate in 2023, casting doubt about the Region’s economic outlook.
These figures, however, have been offset by investors’ confidence that the Bank of Japan will stand pat next week. The weak Tokyo CPI and earnings data seen last week have eased pressure on the BoJ to normalize its monetary policy, which is likely to keep the yen on the back foot, especially if the national CPI confirms these figures on Thursday.
The pair is trading on a bullish trend with the next resistance at 160.15, the 61.8% Fibo retracement of the November - December decline, ahead of 161.74. Supports are 158.50 and 157.25.
Technical levels to watch