EUR/JPY shoots over 153.50 while the PMI of the Eurozone returns to positive

  • The EUR/JPY shoots about 153.50 due to a stronger eurozone PMI growth than projected in January.
  • It is almost certain that the ECB cuts interest rates on Thursday.
  • The BOJ refrained from committing to a predefined rate rise trajectory.

The EUR/JPY pair rises abruptly about 153.50 in the European session on Friday. The asset is strengthened due to the strong demand of the euro (EUR) since the preliminary data of the purchasing managers index (PMI) HCOB of the Eurozone for January have been surprisingly stronger.

PMI HCOB data, compiled by S&P global, showed that general business activity expanded after contracting for two months. The compound PMI, which measures the activity of the private sector in general, advances to 50.2 from 49.6 in December. Economists hoped that general business activity will continue to contract but at a slower pace. The report also showed that the strong business activity in the euro zone mainly came from the German economy, which also returned to expansion, while the French economy continued in decline.

The surprisingly optimistic EUROZONA PMI data has dissipated the fears of a weakening of economic perspectives, however, it is unlikely that the firm expectations of the market decrease that the European Central Bank (ECB) will cut the interest rates in the interest in the Thursday monetary policy meeting. It is almost certain that the ECB cuts its deposit rate of deposit at 25 basic points (PBS) up to 2.75%. The operators are assessing three more cuts of interest rates on the part of the ECB in the next three monetary policy meetings.

Meanwhile, the Japanese Yen (JPY) weakens in all areas since the markets had already discounted a rise in interest rates of 25 basic points (PBS) by the Bank of Japan (Boj), which raised the rates 0.5%loan. The BOJ has also reviewed the inflation forecast, hopes that the pressures on prices will be maintained above 2% to fiscal year 2026 in the midst of confidence in a firm salary perspective.

And in Japanese price today

The lower table shows the rate of change of Japanese Yen (JPY) compared to the main currencies today. Yen Japanese was the strongest currency against the US dollar.

USD EUR GBP JPY CAD Aud NZD CHF
USD -0.68% -0.56% 0.00% -0.32% -0.53% -0.66% -0.17%
EUR 0.68% 0.12% 0.69% 0.36% 0.15% 0.03% 0.52%
GBP 0.56% -0.12% 0.56% 0.24% 0.02% -0.10% 0.39%
JPY 0.00% -0.69% -0.56% -0.33% -0.55% -0.68% -0.19%
CAD 0.32% -0.36% -0.24% 0.33% -0.22% -0.34% 0.15%
Aud 0.53% -0.15% -0.02% 0.55% 0.22% -0.12% 0.32%
NZD 0.66% -0.03% 0.10% 0.68% 0.34% 0.12% 0.48%
CHF 0.17% -0.52% -0.39% 0.19% -0.15% -0.32% -0.48%

The heat map shows the percentage changes of the main currencies. The base currency is selected from the left column, while the contribution currency is selected in the upper row. For example, if you choose the Japanese yen from the left column and move along the horizontal line to the US dollar, the percentage change shown in the picture will represent the JPY (base)/USD (quotation).

The BOJ did not offer clues about when the Central Bank will upload the interest rates again. “We have no preconceived idea,” said the governor of the Boj, Kazuo Ueda. He added that the Central Bank will make a decision at each monetary policy meeting observing “economic and pricing developments, as well as risks.”

Source: Fx Street

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