Euro sticks to modest recovery gains vs Yen; remains close to YTD low ahead of ECB
The EUR/JPY cross struggles to capitalize on its modest intraday gains and trades around the 178.75 region during the first half of the European session on Thursday.
The EUR to Japanese Yen exchange rate edged closer to its yearly bottom ahead of the European Central Bank's (ECB) decision. The EUR/JPY pair traded around 178.75 in the initial half of Thursday's European session. Inflation data released on Tuesday showed Eurozone prices jumped to 3.3% year-on-year in August, up from 2.9% the previous month.
This inflation surge reflects concerns over energy prices and geopolitical tensions in the Middle East. ECB President Christine Lagarde's remarks during the post-meeting press conference are expected to impact the Euro and the EUR/JPY rate. Traders have factored in a 25 basis point hike by the BoJ at its meeting on September 17-18, with high probabilities of a further hike in December.
This optimism around the BoJ's rate hike, coupled with a dovish tone from the ECB, provides support for the EUR/JPY cross. Traders are advised to wait for robust buying before confirming the near-term bottom near 177.85 and considering a recovery.
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