Eurjpy Jumps To Two Week Highs Near 16000 After Boj Rate Decision Eyes On Ecbs Lagarde Speech

Forex News: EUR/JPY Jumps to Two-Week Highs Near 160.00 After BoJ Rate Decision, Eyes on ECB’s Lagarde Speech

EUR/JPY Price Analysis

The EUR/JPY currency pair climbed to a two-week high near 160.00 after the Bank of Japan (BoJ) maintained its ultra-loose monetary policy as widely anticipated. The Japanese central bank left interest rates unchanged at -0.1% and maintained its target for 10-year government bond yields around 0%. The market's focus is now shifting to the European Central Bank (ECB) President Christine Lagarde's speech later today for clues on the central bank's policy path.

BoJ's Rate Decision

The BoJ's policy decision was in line with expectations as the central bank continues to prioritize supporting the economy over tackling rising inflation. Policymakers acknowledged that inflation is elevated but emphasized that it is primarily driven by external factors such as the Russia-Ukraine war and global supply chain disruptions. The BoJ expects inflation to moderate once these factors subside.

The central bank also revised its economic growth forecast for the current fiscal year to 2.9% from 3.8%, citing the impact of the war and rising energy prices. The BoJ maintained its inflation forecast of 2.3% for the current fiscal year, reflecting its belief that inflation will remain above its 2% target for the time being.

EUR/JPY Technical Analysis

The EUR/JPY pair gained ground after the BoJ decision, breaking above a recent resistance level near 159.00. The currency pair is now facing resistance at 160.00, with a break above this level potentially opening the door to further gains. However, a failure to hold above 160.00 could lead to a pullback towards 159.00 or even lower.

ECB's Lagarde Speech

The market's focus is now on ECB President Lagarde's speech later today. Investors will be looking for any signals on the ECB's future monetary policy path. The ECB is widely expected to raise interest rates in the coming months to combat rising inflation, but the timing and pace of rate hikes remain uncertain.

Traders will also be paying attention to Lagarde's comments on the economy and the impact of the war in Ukraine. The ECB is expected to downgrade its economic growth outlook and acknowledge the risks posed by the conflict.

The outcome of the ECB's March policy meeting and Lagarde's speech will likely have a significant impact on the EUR/JPY currency pair. A hawkish tone from the ECB could support the euro, while a dovish tone could weigh on the currency.