EUR/JPY finds some support above 161.00 level, focus on BoJ rate decision

• EUR/JPY rises towards the 162.00 level after finding support around 161.00 during the European session on Friday.
• Kazuo Ueda, governor of the BoJ, said policymakers will discuss whether the outlook is favorable enough to gradually withdraw massive monetary stimulus.
• The ECB's Phillip Lane said March data showed progress in inflation but the ECB needs more time to decide when to ease policy.

The crossing EUR/JPY attracts some sellers above 161.00 support level during the early hours of the European session on Friday. The cautious sentiment in the market offers some support to the Japanese Yen (JPY) against the Euro (EUR). However, The lower expectations that the BoJ will soon abandon its negative rates could limit the fall of the cross. Markets await the Bank of Japan (BoJ) interest rate decision in search of new catalysts. The cross is currently trading near 161.93, up 0.43% on the day.

Uncertainty surrounding the Bank of Japan's next policy decision is likely to weaken the Yen and create a headwind for the EUR/JPY cross. The governor of the BoJ, Kazuo Ueda stated that policymakers will debate whether the outlook is favorable enough to gradually withdraw massive monetary stimulus. Meanwhile, rising geopolitical tension in Europe could boost safe-haven monetary flows and benefit the Yen. Western officials reported Friday that Russia has moved tactical nuclear weapons from its borders to neighboring Belarus, several hundred kilometers closer to NATO territory.

Regarding the Euro, the chief economist of the European Central Bank (ECB), Philip Lane declared that the central bank needs time to get a clearer picture of inflationary pressures in June. ECB President Christine Lagarde stated during her March meeting press conference that the first rate cuts are likely to take place in June and not April.

Friday's developments are unlikely to move the market as investors await next week's BoJ policy meeting. The outcome of the BoJ interest rate decision could give a clear direction to the EUR/JPY cross in the short term.