The EUR/JPY pair experiences upward momentum, trading near the 163.00 level during the early European session on Monday. This move is driven by a weaker Japanese Yen (JPY) amidst ongoing uncertainty surrounding the Bank of Japan’s (BoJ) future rate-hike plans, coupled with upcoming European Central Bank (ECB) speeches.
BoJ’s Kazuo Ueda Keeps Markets Guessing
BoJ Governor Kazuo Ueda’s remarks on Monday shed light on the central bank’s cautious approach to monetary tightening. Ueda emphasized that future adjustments to monetary policy will hinge on economic, price, and financial conditions. While he suggested the BoJ might not wait for all external risks to dissipate before implementing another rate hike, he stopped short of confirming whether a December hike is on the horizon. The lack of clarity weighed on the JPY, boosting the EUR/JPY pair.
Japanese Authorities Monitor FX Market Volatility
Despite the weakening Yen, Japan’s Finance Minister Katsunobu Kato reiterated on Friday that the government will monitor foreign exchange market movements with heightened vigilance. He signaled readiness to intervene in cases of excessive volatility, which may limit EUR/JPY’s upside potential.
ECB Policy Comments Offer Mixed Signals
On the Euro side, the market awaits speeches from ECB Vice President Luis de Guindos and Chief Economist Phillip Lane later today. Recent comments from ECB board member Piero Cipollone highlighted the need for rate cuts to support the Eurozone’s fragile economic recovery, especially amid potential trade pressures from the U.S. Cipollone emphasized that any rate adjustments will depend on future data. These dovish statements could exert downward pressure on the Euro in the short term.
Key Takeaway for EUR/JPY Traders
As traders focus on the interplay between BoJ uncertainty and ECB dovishness, EUR/JPY is likely to remain influenced by central bank commentary and broader market sentiment. Keep an eye on developments in monetary policy and interventions in the foreign exchange market, which could shape the pair’s trajectory in the coming sessions.
