FXStreet (Guatemala) – EUR/JPY has rallied on the back of a better bid environment while the Yen was fragile on weak economic data overnight and the bearish comments from Japanese officials.
EUR/JPY and bearish Japan
Kuroda signalled that oil prices put downward pressure on inflation while the financial minister Aso said that there are clear downside risks ahead. Machinery orders were down for July and PPI missed expectations. Further mentions of easing from Abe’s advisor, Yamamoto, prompted a bid in the cross as well.
EUR/JPY and Global stocks
Meanwhile, stocks overnight did not perform as well as previous sessions this week as concerns about the economies of China and Japan cast a cloud over the world growth picture. Tokyo’s Nikkei N225 fell 2.5% percent. Chinese stocks (.SSEC) finished down as well, falling more than 1 percent each. Hong Kong (.HIMSCI) and Australian (.AXJO) stocks both lost more than 2 percent.The bourses in Europe all closed in the red as well while the US went against the grain and started off well. S&P futures are 0.25% at time of writing.
EUR/JPY remains better bid with EUR/USD snapping the 200 DMA at 1.1253 in a weak dollar environment which was set off on import prices dropping the further in seven months which took USD/JPY lower on pure weakness in the greenback. However, EUR/USD is the main driver in the cross and eyes the 1.13 handle, boosted yesterday in the US and early Asia by offsets in the carry trade.
EUR/JPY failures on 136 opens downside
136 channel psychological resistance is the target for the cross and a close above 136.50/80. On failures, EUR/JPY’s support comes at 135.50, 134.95, 134.44 (200 hourly SMA), 134.03 (50 hourly SMA).
(Market News Provided by FXstreet)