EUR/JPY relaxes from its annual maximum, climbing a bit around 164.30 before the iPC of the Eurozone

• The EUR/JPY struggles to capitalize on the modest profits of the Asian session towards a new annual maximum.
• The expectations for cutting the ECBs stop to the EUR troists when opening new positions and limiting the crossing.
• The moderate pause of the BOJ could weaken the JPY and offer support for cash prices.

The EUR/JPY crossing is based on the explosive recovery of the previous day after the Bank’s policy decision (BOJ) and plays a new maximum of the year, around the 164,60-164.65 area during the Asian session on Friday. However, cash prices backed some pips from the maximum daily and are currently negotiated with modest intradic earnings, around the 164.30 area, while the bulls are cautious before the crucial inflation figures to the consumption of the eurozone.

The preliminary version is expected to show that the harmonized consumer prices index (HICP) of the Eurozone was softened to 2.1% year -on -year in April from 2.2% of the previous month. However, underlying inflation, which excludes volatile food and energy prices, increases 2.5% from 2.4% in March. In the context of a fall in German inflation at its lowest level in seven months, the softest inflation figures of the Eurozone will support the possibility of another interest rate cut by the ECB in June. This, in turn, could exert some downward pressure on the shared currency.

Looking ahead to key data, operators seem reluctant to open new bullish positions, which, in turn, is considered an obstacle to the EUR/JPY crossing. However, a modest fall of the US dollar (USD) is considered to offer some support to the euro. Apart from this, the moderate pause of the BOJ on Thursday contributes to the low relative performance of the Japanese Yen (JPY) and helps that cash prices be negotiated with a positive trend. The BOJ, as was widely anticipated, decided to keep the short -term interest rates stable at 0.5% at the end of a two -day policy meeting on May 1.

However, the Central Bank adopted a cautious tone by cutting its growth and inflation forecasts. In fact, the BOJ hopes that the Japanese economy will grow 0.5% in the current fiscal year against its previous projection of 1.1% in January and reviewed its underlying IPC prognosis from 2.4% to 2.2% for fiscal year 2025. This forced investors to reduce their expectations for the next increase in BOJ rates in June or July. This, together with relaxation signs of commercial tensions between the US and China, could continue to weaken the safe refuge JPY and offer support to the EUR/JPY crossing.