EUR/JPY - On the rise as BOJ's 2 percent inflation target remains out of reach
- The yen is under pressure after Japanese CPI stressed the need for ultra-easy monetary policy.
- EUR/JPY is exploring upside above the key 23.6 percent Fibonacci retracement level.
The EUR/JPY is biased bullish in Asia, largely due to the soft tone in the Japanese Yen. As of writing, it is trading at 149.14.
The Japanese Yen ran into offers after the Japanese data released earlier today showed the Bank of Japan's 2 percent inflation target remains a distant dream and hence, the central bank will likely refrain from jumping the hawkish G-7 bandwagon. The nationwide core consumer price index, which includes oil products but excludes volatile fresh food costs, rose 0.9 percent in January from a year earlier, according to Reuters report. The actual print bettered the estimate of 0.8 percent but matched the December figure.
Meanwhile, the minutes of the European Central Bank (ECB) meeting showed some officials want to drop their easing bias on QE and could do so in the next 2 meetings. Further, the stock markets seem to have regained poise (Dow added 164 points yesterday), thus the common currency could remain well bid against the funding currency JPY.
EUR/JPY Technical Levels
A close above 149.59 (10-day MA) would mean the pair has bottomed out at 147.96 (Feb. 14 long-tailed doji candle low) and could yield a sustained move higher to 150.93 (Feb. 21 high). A violation there would expose 152.05 (50-day MA).
On the downside, breach of support at 148.88 (Feb. 16 low) would open up downside towards 147.96 (Feb. 14 low) and 147.69 (200-day MA).