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EUR/JPY reaches a new seven-year high of 142.30 despite Japan's GDP surpassing expectations
The EUR/JPY exchange rate has risen beyond 142.30 despite an increase in Japan's GDP figures. The bulls of linked currencies are expecting the ECB's monetary policy statement. Despite rising inflation, the ECB anticipates maintaining its current interest rate policy.
Despite the Japanese Cabinet Office's release of better-than-anticipated Gross Domestic Product (GDP) figures during the Tokyo session, the EUR/JPY pair has reached a new seven-year high at 142.32. The annualized GDP figures have shown a considerable improvement, as the result has improved to -0.5 percent from -1 percent previously and against forecasts. In addition, the quarterly GDP has increased to -0.1 percent from -0.3 percent and -0.2 percent previously.
A possible increase in Japan's GDP has failed to strengthen the yen, and the cross has reached a new seven-year high.
In the meanwhile, the bulls of shared currencies are expecting Thursday's release of the European Central Bank's (ECB) interest rate decision. According to market consensus, the ECB is anticipated to maintain interest rates at 0%. The possibility of aggressive instructions from ECB President Christine Lagarde cannot be ruled out. Rising inflationary pressures in the eurozone have a negative impact on the incomes of European people. Consequently, the ECB may raise its interest rates later this year.
Inflation in the eurozone surpassed 8 percent in May, and more increases are anticipated as a result of the European Union's decision to impose a ban on oil imports from Russia. Due to its reliance on Russian fossil resources, switching to any other supply would require some time, which might increase oil prices in the meantime.
Wednesday, however, Eurostat will provide the GDP figures. The preliminary estimate for the annual GDP is 5.1%, while the estimate for the quarterly GDP is 0.3%.
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