Euro Yields to Pressure as BoJ and ECB Prepare Rate Hikes

The Euro has flattened against the Japanese Yen at around 183.85 during the European trading session on Friday, as investors wait for fresh cues regarding potential US-Japan joint intervention to prop up the yen.

Last month, the US and Japan intervened jointly to counter 'excessive volatility and disorderly movements' in the Japanese currency. Market analysts now expect both the Bank of Japan (BoJ) and the European Central Bank (ECB) to raise interest rates in their September policy meetings.

Analysts at ING predict a 75% chance that the BoJ will hike interest rates by 25 basis points in September, while Reuters sources indicate that the BoJ is set to raise rates as soon as September and may increase them more aggressively thereafter.