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EUR/JPY slips near 185.6 as Japan CPI reinforces BoJ hike odds
Japan’s July core CPI rose to 1.8% year on year, helping lift market pricing for a September rate increase to about 82%, from roughly 23% before the BoJ’s July meeting.
EUR/JPY traded with mild losses around 185.6 in early European trade, as the Japanese yen firmed versus the euro following July inflation data that strengthened expectations for another Bank of Japan rate hike, according to FXStreet.
Japan’s headline CPI climbed to 1.9% year on year in July, up from 1.6% in June, reaching the highest level so far this year, while core CPI rose 1.8% year on year versus 1.6% previously.
FXStreet also noted that market pricing for a September rate increase is about 82%, more than tripling from roughly 23% immediately before the BoJ’s July policy meeting, with traders watching remarks from BoJ Deputy Governor Ryozo Himino on Thursday for signals on the pace of future tightening.
On the technical side, the pair held a constructive near term bias above the 100 day simple moving average near 185.15, with additional support cited around 184.00 and 180.60, while upside resistance was outlined near the Bollinger upper band at 187.35.