The EURJPY exchange rate is awaiting the Bank of Japan’s latest press conference comments and a growth release from Germany’s economy.
EURJPY – Daily Chart
The EUR/JPY price has some interesting levels on the daily chart, with resistance at 177.92. A price gap found two support tests at the 175 level, which will be important to the uptrend.
The Bank of Japan has been debating whether conditions are suitable to raise interest rates again, after worries about a tariff-induced recession eased. However, political changes may see the bank hold steady for now.
Recent data has shown little evidence that higher U.S. tariffs were hurting the economy, with exports increasing in September. Business confidence improved in the third quarter, and companies are holding onto bullish spending plans.
However, a majority of analysts expect the central bank to hold interest rates steady at 0.5% at the October meeting, following criticism from new Prime Minister Sanae Takaichi, who has called for BOJ cooperation in achieving wage-growth inflation.
In a speech earlier in the month, BOJ Governor Kazuo Ueda warned of risks to the economic outlook, such as uncertainty over the United States economy. The backdrop of U.S.-China trade talks is also very important to Japan and the broader Asian region.
“With U.S. economic data not coming out due to the government shutdown, I don’t think Ueda’s concerns would be dispelled by next week’s meeting,” said Naomi Muguruma, chief bond strategist at Mitsubishi UFJ.
“It’s also hard to believe the inauguration of Takaichi’s administration won’t have any impact on the BOJ’s rate-hike timing,” she said.
The recent change in Prime Minister is a signal for rates to remain as they are, but traders will wait for the press conference at 2:30 pm HKT. Traders will also be wary of headline risk from the trade meeting between Trump and Xi.
