Euro Holds Steady Against Yen Amid German Data Boost and BoJ Rate Hike Expectations
The Euro has steadied against the Japanese Yen, trading around 185.65 on Thursday, virtually unchanged from the previous day.
This stability is largely due to positive German data, which beat market expectations.
According to the GfK Consumer Confidence Index, consumer confidence in Germany improved significantly for September, rising to -26.6 from -29.4 in August, compared to the forecasted -29.6.
The Japanese Yen, on the other hand, continues to struggle due to concerns over Japan's fiscal position, with a Reuters poll showing 57% of economists surveyed expect the Bank of Japan (BoJ) to raise its policy rate by 25 basis points to 1.25% at its September meeting.
Rabobank analysts note that several central banks are now flagging tighter policy to combat the energy shock and potential inflationary pressures, with time not on their side as the longer disruptions persist, the stronger the inflationary impact will be.