- The EUR/JPY weakens around 162.35 in the first measures of the European session on Friday.
- The positive perspective of the cross prevails above the 100 -day EMA, but greater consolidation cannot be ruled out.
- The immediate resistance level arises in 163.31; The initial support level to be monitored is 161.88.
The EUR/JPY crossing moves down about 162.35 during the European session on Friday. The Japanese Yen (JPY) is strengthened in front of the euro (EUR) due to the growing expectations that the Bank of Japan (Boj) will continue to raise interest rates this year. The bets were backed by inflation reports of the consumer price index (CPI) of Japan higher than expected, published earlier this Friday.
Technically, in the long term, the upward trend of the EUR/JPY remains at stake since the crossing is well supported above the exponential mobile (EMA) average of 100 days in the daily chart. However, greater consolidation or temporary sale cannot be ruled out, with the 14 -day relative force (RSI) index, standing below the midline about 46.95.
In the upward case, the immediate resistance level is located in 163.31, the maximum of May 21. A sustained trade above this level could attract some buyers around 164.80, the upper limit of the Bollinger band. Further north, the following obstacle to monitor is 166.00, the psychological level and maximum of November 7, 2024.
The first downward objective for the crossing arises in 161.88, the 100 -day EMA. Extended losses could see a fall to 161.33, the lower limit of the Bollinger band. A rupture of this level could pave the path to the key containment level in the psychological brand of 160.00.
EUR/JPY DAILY GRAPH
And in Japanese faqs
The Japanese Yen (JPY) is one of the most negotiated currencies in the world. Its value is determined in general by the march of the Japanese economy, but more specifically by the policy of the Bank of Japan, the differential between the yields of the Japanese and American bonds or the feeling of risk among the operators, among other factors.
One of the mandates of the Bank of Japan is the currency control, so its movements are key to the YEN. The BOJ has intervened directly in the currency markets sometimes, generally to lower the value of YEN, although it abstains often due to the political concerns of its main commercial partners. The current ultralaxy monetary policy of the BOJ, based on mass stimuli to the economy, has caused the depreciation of the Yen in front of its main monetary peers. This process has been more recently exacerbated due to a growing divergence of policies between the Bank of Japan and other main central banks, which have chosen to abruptly increase interest rates to fight against inflation levels of decades.
The position of the Bank of Japan to maintain an ultralaxa monetary policy has caused an increase in political divergence with other central banks, particularly with the US Federal Reserve. This favors the expansion of the differential between the American and Japanese bonds to 10 years, which favors the dollar against Yen.
The Japanese Yen is usually considered a safe shelter investment. This means that in times of tension in markets, investors are more likely to put their money in the Japanese currency due to their supposed reliability and stability. In turbulent times, the Yen is likely to be revalued in front of other currencies in which it is considered more risky to invest.
EUR/JPY DAILY GRAPH
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
