EUR/JPY trades lower at 176.80 as disappointing Eurozone retail data and hawkish Bank of Japan policy expectations drive a shift toward the safe-haven Yen.
The pair trades down 0.13% to around 176.80 as weak Eurozone Retail Sales (September: -0.7% MoM vs -0.1% expected) weigh on the Euro while BoJ rate-hike expectations and risk-off flows lift the Yen. Diverging policy outlooks argue for continued pressure, though strong German Industrial Production (+0.7% MoM) partly offsets the Euro downside.
Weak Eurozone retail sales data hurt the Euro, while expectations of another Bank of Japan rate hike and risk-off demand for the Yen push the pair lower.
A dovish turn in BoJ expectations or stronger Eurozone data ahead of the December ECB meeting could ease the pressure, as German industrial production already beat expectations.
BoJ September meeting minutes released Thursday show policymakers agree on continuing gradual rate hikes, with some members favouring a faster pace, reinforcing expectations of a hike as early as December. Combined with broader risk-off safe-haven demand, this keeps the Yen supported, particularly against the Euro.
The BoJ's September meeting minutes signalled continued gradual interest rate hikes, with some members even advocating a faster pace, boosting expectations of a December hike, while risk-off sentiment adds safe-haven demand for the Yen.
September Retail Sales fell 0.7% MoM, far worse than the expected 0.1% decline, and annual growth slowed to 0.4% from 1.3%, pointing to persistent household demand weakness that limits the Euro's recovery potential. ECB's Lane also flagged tightening financial conditions and more restrictive fiscal policy from next year.
The Euro weakened against major currencies, with the article noting EUR/JPY down 0.13% around 176.80, as the data pointed to weakening consumer demand in the Eurozone.
The EUR/JPY pair fell 0.13% to 176.80 on Friday as Eurozone retail sales plummeted 0.7% in September, missing expectations. Conversely, the Japanese Yen gained momentum following BoJ meeting minutes that signaled potential interest rate hikes as early as December. Diverging monetary policy outlooks and risk-off sentiment continue to weigh on the Euro.
The pair is under pressure due to weak Eurozone consumer demand data and rising expectations that the Bank of Japan will hike interest rates in December.
The Euro remains pressured by persistent household demand weakness and cautious commentary from ECB Chief Economist Philip Lane regarding future policy.