EUR/JPY Falls Below 174.50 Amid Concerns About Japanese Intervention

EUR/JPY weakened to around 174.20 in Asian trading on Thursday, ending a six-day winning streak. Concerns about Japanese authorities’ intervention in foreign exchange (FX) boosted the Japanese yen (JPY). German factory orders for May and minutes of the ECB’s monetary policy meeting will be released later on Thursday.

Growing speculation about FX intervention by Japanese authorities has provided some support to the yen and limited the upside for the currency pair. FX strategists at Rabobank said FX intervention may be imminent as the weak yen puts downward pressure on consumer confidence.

Data released on Wednesday showed that Japan’s final service purchasing managers’ index fell to 49.4 in June from 49.8 in May, marking the biggest drop since January 2022 and one of the biggest drops on record. This in turn could weaken the yen and benefit the cross.

In the euro, the far-right’s hopes of a victory in the French election were dashed on Tuesday as centrist and left-wing candidates reluctantly united to prevent Marine Le Pen’s National Rally from taking power for the first time, Politico reported. However, the French parliamentary election will be announced on Sunday, which may increase volatility in the euro.

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