EUR/JPY Jumps To New Daily Highs Around The Mid-169.00 Range

The EUR/JPY cross attracted some dip buying in the Asian session on Friday and recovered some of the previous day’s decline from more than a week high to break through the 170.00 mark. The intraday positive movement gathered pace after the Bank of Japan (BoJ) announced its policy decision, lifting the EUR/JPY to the mid-$169.00 range or a new intraday high in the latest hour.

As widely expected, the BoJ decided to keep interest rates unchanged at the end of its June policy meeting and did not give any signal on the timing of the next rate hike. In addition, some market participants expected the BoJ to announce a possible reduction in the size of monthly bond purchases, but this decision by the BoJ may disappoint them. This situation and the maintenance of generally positive risk sentiment in the market weighed on the safe-haven yen and boosted the EUR/JPY cross.

Meanwhile, the snap election in France has raised broader political concerns in the Eurozone. This may continue to act as a resistance for the euro and curb the EUR/JPY cross from gaining significant ground. Therefore, it would be prudent to wait for strong follow-through buying and a sustained breakout of the short-term trading range of the past two weeks or so before establishing a position against the bullish trend. Now, traders are looking forward to a speech by Bank of Japan Governor Kazuo Ueda to provide new impetus.

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