Euro Recovers vs Yen Amid BoJ Tightening Expectations
The Euro (EUR) has clawed back some of its early losses against the Japanese Yen (JPY) during the European trading session on Tuesday. At press time, EUR/JPY is down 0.3% to near 178.85 even after recovering from its intraday low of 177.85.
The outlook for the pair remains bearish as market experts see a strong Japanese Yen's outlook amid expectations that the Bank of Japan (BoJ) will extend its monetary tightening cycle even after hiking interest rates at the policy meeting next week.
Analysts at Commerzbank highlight that 'an interest rate hike next week is now priced in at roughly 96%, and the market expects further hikes to follow quickly thereafter.'
The European Central Bank's (ECB) interest rate decision on Thursday is also being closely watched, with experts confident that the ECB will hike interest rates in the policy meeting. However, moderate Eurozone economic growth and higher energy prices are complicating the central bank's monetary policy path.