- EUR/JPY holds the recovery move from an almost six-week low of 155.15.
- The BoJ is expected to leave interest rates unchanged at 0.25% on Friday but will deliver hawkish guidance.
- ECB officials refrain from committing a pre-defined interest rate cut path.
The EUR/JPY pair holds a slight recovery move above 156.00 in Tuesday’s European session from a fresh, almost six-week low of 155.15 recorded on Monday. The cross holds recovery for now but its outlook remains uncertain amid growing speculation that the Bank of Japan (BoJ) will raise interest rates further this year.
The BoJ has already raised interest rates to 0.25% in its last three meetings. Analysts at Standard Chartered see the BoJ interest rates rising to 0.5% by the year-end. The confidence of market experts has increased due to inflation remaining above 2% for the past 21 months.
In the monetary policy meeting on Friday, the BoJ is expected to leave key borrowing rates unchanged at their current levels.
Meanwhile, the Euro (EUR) gains as market speculation for the European Central Bank (ECB) delivering a consecutive interest rate cut in the October meeting has waned. The comments from ECB Governing Council member Peter Kazimir on Monday indicated that the central bank will wait for more good data to meet their projections before easing the monetary policy further.
“The ECB needed to be sure that incoming data confirmed its projections, otherwise policymakers might regret rushing to cut borrowing costs before inflation has been sustainably defeated,” Kazimir said, Reuters reported.
On the economic data front, the Eurozone ZEW Survey – Economic Sentiment – which measures institutional investor sentiment – has declined to 9.3 in September, the lowest level seen since November 2023. The sentiment data was expected to fall slightly to 17.6 from 17.9 in August.
Economic Indicator
BoJ Interest Rate Decision
The Bank of Japan (BoJ) announces its interest rate decision after each of the Bank’s eight scheduled annual meetings. Generally, if the BoJ is hawkish about the inflationary outlook of the economy and raises interest rates it is bullish for the Japanese Yen (JPY). Likewise, if the BoJ has a dovish view on the Japanese economy and keeps interest rates unchanged, or cuts them, it is usually bearish for JPY.
Read more.Next release: Fri Sep 20, 2024 03:00
Frequency: Irregular
Consensus: -
Previous: 0.15%
Source: Bank of Japan
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD clings to recovery gains near 1.0850 ahead of Fedspeak
EUR/USD trades in positive territory near 1.0850 on Friday following a four-day slide. China's stimulus optimism and a broad US Dollar correction help the pair retrace the dovish ECB decision-induced decline. All eyes remain on the Fedspeak.
GBP/USD pares UK data-led gains at around 1.3050
GBP/USD is trading at around 1.3050 in the second half of the day on Friday, supported by upbeat UK Retail Sales data and a pullback seen in the US Dollar. Later in the day, comments from Federal Reserve officials will be scrutinized by market participants.
Gold at new record peaks above $2,700 on increased prospects of global easing
Gold (XAU/USD) establishes a foothold above the $2,700 psychological level on Friday after piercing through above this level on the previous day, setting yet another fresh all-time high. Growing prospects of a globally low interest rate environment boost the yellow metal.
Crypto ETF adoption should pick up pace despite slow start, analysts say
Big institutional investors are still wary of allocating funds in Bitcoin spot ETFs, delaying adoption by traditional investors. Demand is expected to increase in the mid-term once institutions open the gates to the crypto asset class.
Canada debates whether to supersize rate cuts
A fourth consecutive Bank of Canada rate cut is expected, but the market senses it will accelerate the move towards neutral policy rates with a 50bp step change. Inflation is finally below target and unemployment is trending higher, but the economy is still growing.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.