June 10, 2024 12:07 GMT
EURJPY Approaches Support As BOJ Meeting Looms
EUR
- EURJPY sits 0.45% lower as we crossover into the US session, in a move that appears to be a technical correction, with the medium-term trend structure remaining bullish. Support to watch is at a key trendline drawn from the Dec 7 ‘23 low, at 167.49, which closely matches with the 50-day EMA. A clear breach of this line would highlight a potential reversal.
- The moves come ahead of this week’s Bank of Japan meeting, where the board is likely to keep its policy interest rate at a range of zero percent to +0.1%. The board continues to monitor consumption with a view to a possible hike in coming months, though it could act this week to reduce its monthly government bond purchases from around JPY6 trillion.
- As they prepare their decision, officials will have to make challenging calculations regarding banks’ appetite for additional bond purchases and demand for excess reserves, as well as term premia. Policymakers will also examine the extent to which the weak yen increases upside risks to inflation as they assess chances of achieving their 2% target. Our policy piece explores further: https://marketnews.com/mni-boj-watch-boj-looks-at-trimming-jgb-buys-rate-on-hold
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