Market news
20.10.2023, 09:21

EUR/JPY gains ground near 158.80 after BoJ Governor Ueda’s comments

  • EUR/JPY continues the winning streak for the second successive day.
  • German PPI data reveals a decline in prices in the primary markets.
  • BoJ Governor Ueda mentioned that the central bank remains committed to achieving a 2% inflation target.

EUR/JPY extends gains for the second consecutive day, trading higher near 158.80 during the European session on Friday. The pair receives upward support following the comments from Bank of Japan (BoJ) Governor Kazuo Ueda.

BoJ Governor Kazuo Ueda restated on Friday that the central bank remains committed to achieving a 2% inflation target in a stable and sustainable manner. This objective is coupled with a focus on wage growth, and Ueda emphasized that the current accommodative policy will be maintained with patience

Traders are on edge, expressing concerns about the possibility of Japan intervening to counter a prolonged depreciation in the JPY, which could limit the advance of the EUR/JPY pair.

Markets are currently grappling with the possibility of the European Central Bank (ECB) discontinuing policy measures. This contemplation comes despite inflation levels surpassing the bank's target and mounting concerns about the risk of a slowdown or stagflation in the European zone.

In a statement made on Wednesday, ECB President Christine Lagarde highlighted that underlying inflation remains robust, and wage growth continues to maintain historically high levels. These factors contribute to the ongoing narrative shaping the Euro's performance against the Japanese Yen.

Adding to the economic puzzle, Germany's Producer Price Index (PPI) indicates a decrease in prices in the primary markets. The monthly figures reveal a 0.2% decline, deviating from the expected 0.4% increase in September. On a year-over-year basis, the drop is even more pronounced at 14.7%, exceeding the market's anticipation of a 14.2% fall.

 

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