The bulls are back in charge of the EURJPY exchange rate after expectations of a Bank of Japan rate hike were reduced.
EURJPY – Daily Chart
The EUR/JPY has rallied from support at the 181.00 level to trade at 184.50. The resistance levels are clearly above 185.00.
The EURJPY exchange rate followed through with a second strong day on Wednesday after reports that the Japanese Prime Minister had raised concerns to the BOJ about rate hikes.
The BOJ had been planning to raise rates further to fix stubborn inflation. But PM Sanae Takaichi has stood on a platform of stimulus and economic growth, which puts her at odds with the central bank.
Traders scaled back their bets on imminent rate increases starting in April, and the euro is rallying. Tomorrow, we have a speech from outgoing European Central Bank President Christine Lagarde at 3:30 pm HKT.
Christine Lagarde is expected to leave the ECB before her term ends, paving the way for Klaas Knot to succeed her, according to a Bloomberg survey of economists.
More than half of respondents said that Lagarde would step down this year, while less than 30% predict she’ll see out her eight-year term, which ends next October.
If she chooses the early exit, Knot would most likely get the job after previously serving as the Dutch central bank chief, economists said.
Questions have been raised about Lagarde after a report that she’ll step aside before French elections so President Emmanuel Macron can help find her replacement. Lagarde has distanced herself from the early exit talk, but it is unlikely that her successor would alter the ECB’s path radically.
A recent US Supreme Court decision blocking Trump’s tariffs has put a trade deal on hold, and that could ultimately boost the euro.
