Extends Gains

EUR/JPY has added a handful of pips, extending Friday's bounce off the 50-DMA, and last trades at Y126.97. The rate has stuck to a tight range amid a relatively light macro flow.

• As flagged before, Japan's Renesas Electronics confirmed that it's in talks to acquire the UK's Dialog Semiconductor. BBG reported that the Japanese company would pay about EUR4.9bn.
• In an interview with BMF TV, ECB Pres Lagarde stressed the need for "soft exit" from stimulus "when the pandemic is behind us and the economy will start to open again."
• In a separate interview with Le Journal du Dimanche, Lagarde anticipated that the eurozone's economic recovery will accelerate in the summer, noting that "the economic recovery has been delayed, but not derailed."
• Ex-European Commission Pres Juncker told Neue Zuercher Zeitung that he doesn't expect short- or medium-term negative effects on EUR on the back of measures deployed to fight the Covid-19 crisis.
• Mario Draghi wrapped up consultations with Italian party leaders and his bid to form a gov't of national unity received a boost after Lega & 5 Star Movement signalled their backing for the former ECB chief.
• Bulls need a clearance of Jan 29 high, located at Y127.34, before taking aim at Jan 7/Mar 1, 2019 highs of Y127.49/50. On the downside, a breach of the 50-DMA at Y126.34 would bring Jan 27 low of Y125.60 into play.
• Focus moves to German industrial output as well as speeches from ECB's Lagarde & Villeroy.