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The EUR/JPY exhibits a slight recovery from 140.00, with ECB-BOJ policy in focus
After a strong fall towards 140.00, the EUR/JPY has seen a minor rebound. The European Central Bank is anticipated to raise interest rates for the first time in eleven years. A dovish approach is anticipated from the BOJ in order to maintain market liquidity.
The EUR/JPY pair has demonstrated a less certain comeback from the psychological support level of 140.00. After a slight rebound, the cross has detected resistance around 140.0. As investors divert their attention to this week's monetary policy announcements by the European Central Bank (ECB) and the Bank of Japan (BOJ), it is anticipated that the asset will experience dramatic price fluctuations in the near future.
In light of market buzz, the ECB is anticipated to announce a rate increase, breaking its 11-year preservation of the status quo. Price pressures are hitting households, whose consumption and savings patterns have been drastically altered by a substantial decline in their real income.
To contain the raging inflation, the European Central Bank (ECB) has already announced the end of the Asset Purchase Program (APP) to restrict liquidity. Now, the emphasis will turn to an increase in interest rates in pursuit of market-available cheap money.
Aside from that, the release of eurozone Consumer Confidence will be the most important event of the week. The preliminary estimate for the eurozone Consumer Confidence data is -24.5, as opposed to the previous estimate of -23.6.
The Bank of Japan (BOJ) is anticipated to maintain the status quo when announcing its interest rate decision. Governor Haruhiko Kuroda of the Bank of Japan is anticipated to adopt a dovish posture, since the BOJ is destined to stimulate global economic demand. The BOJ is focused on maintaining an inflation rate over 2 percent, and in order to do so, it must concurrently increase labor costs.
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