EUR/JPY remains well offered near one-month low, holds above 170.00 mark

• EUR/JPY drifts lower for the third straight day amid some follow-through JPY buying.
• A suspected intervention and rising bets for another BoJ rate hike underpin the JPY.
• A weaker USD benefits the Euro and might help limit losses amid a positive risk tone.

The EUR/JPY cross trades with a negative bias for the third successive day on Tuesday, albeit manages to hold above the 170.00 psychological mark, or a nearly one-month low touched last week. 

The Japanese Yen (JPY) continues to draw support from expectations the Bank of Japan (BoJ) could hike interest rates again at its upcoming policy meeting and a suspected intervention from authorities to prop up the domestic currency. Adding to this, the US political uncertainty drives some haven flows towards the JPY and turns out to be a key factor exerting downward pressure on the EUR/JPY cross. 

Meanwhile, the European Central Bank (ECB) downgraded its view of the Eurozone's economic prospects and predicted that inflation would keep falling, leaving the door for a rate cut in September wide open. This contributes to the shared currency's relative underperformance and the offered tone surrounding the EUR/JPY cross, though a combination of factors could help limit deeper losses.

Dovish Federal Reserve (Fed) expectations keep the US Dollar (USD) bulls on the defensive and benefit the Euro. Furthermore, a generally positive risk tone might cap any further JPY appreciation and offer some support to the EUR/JPY cross. This makes it prudent to wait for acceptance below the 170.00 mark before positioning for an extension of the recent pullback from the highest level since 1992. 

The market focus now shifts to the release of flash PMI prints on Wednesday, which will be looked upon for fresh insight into the global economic health. This, along with the broader risk sentiment, will influence demand for the safe-haven JPY and provide some meaningful impetus to the EUR/JPY cross.