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EUR/JPY eases near 12-week high as Eurozone PMI beats
EUR/JPY was around 186.3 after Thursday’s 12-week high of 186.67, with a stronger Eurozone Composite PMI supporting expectations the ECB keeps policy restrictive.
EUR/JPY is consolidating with modest losses, trading around 186.3 after reaching a 12-week high of 186.67 on Thursday, according to FXStreet. The latest move follows fresh data from both Japan and the Eurozone that failed to trigger a larger market reaction.
FXStreet points to a preliminary Eurozone HCOB Composite PMI rising to a five-month high of 51.9 in July, above the 50.2 forecast, with Services PMI at 51.6 and Manufacturing PMI at 52.0. The stronger readings add to signals of economic resilience and reinforce expectations that the European Central Bank can maintain a restrictive stance.
FXStreet also notes the ECB kept its three key interest rates unchanged on Thursday, after raising them by 25 basis points in June, and said future decisions depend on its inflation outlook and related risks. Traders have fully priced in another rate increase at the September meeting, and one ECB policymaker said inflation is likely to stay above target for a long time while judging the chance of a hike versus a hold as higher.
On the yen side, FXStreet says the Japanese yen remains broadly weak, with USD/JPY pinned near a 40-year high and traders watching for potential intervention risk. Japan’s June headline CPI rose 1.7% year over year versus 1.5% in May, while Reuters, cited by FXStreet, reported the BoJ is expected to keep rates unchanged next week but warn inflation could exceed its 2% target.
Latest closeUSD/JPY 163.84 ▲0.4%