EUR/JPY struggles around 139.40 as Europe energy crisis dwindles, ECB hogs limelight
|- EUR/JPY is facing hurdles around 139.40 as market mood sours on the Eurozone energy crisis.
- Gazprom’s promise of energy supplies won’t be able to offset the expected supply from Nord Stream.
- Japanese GDP data is expected to remain upbeat ahead.
The EUR/JPY pair is facing hurdles around 139.40 as the risk-off market tone has weakened the risk-sensitive currencies. A follow-up buying after a gap-down opening is displaying exhaustion signals as the shared currency bulls are sensing barricades around Friday’s low. The asset is expected to display topsy-turvy moves as investors have shifted their focus on the interest rate decision by the European Central Bank (ECB).
The eurozone has entered into the elite club of a 9%+ inflation rate after the US and the UK and it has left no other option for the ECB than to dictate a jumbo rate hike. Investors should be aware of the fact that the ECB has yet not hiked its interest rates like the other central banks. The ECB has announced only one rate hike of 50 basis points (bps) yet, other central banks are approaching towards conclusion fastly.
The announcement of increasing gas supplies to eurozone is bewildering the market participants. After unscheduled maintenance of the Nord Stream 1 pipeline to Germany, which was expected to conclude on Saturday, escalated due to requirements for more maintenance. However, the Russian energy giant, Gazprom will increase its shipments of gas to Europe via Ukraine, according to Politico. The company said it would ship some 42.7 million cubic meters of natural gas through Ukraine to Europe. Its delivery from Ukraine is creating havoc for the market participants.
Meanwhile, Japanese Gross Domestic Product (GDP) data will also remain a key event for investors. The quarterly GDP is expected to improve to 0.7% against the prior release of 0.5%. While the annualized data is seen as extremely higher at 2.9% vs. 2.2% recorded earlier.
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