FxWirePro: EUR/JPY plunges into daily cloud, further weakness on cards

EUR/JPY chart - Trading View

EUR/JPY was extending previous session's slump as the pair trades 0.11% lower on the day at 131.03 at around 06:15 GMT, after closing 1.20% lower in the previous session.

The Bank of Japan (BOJ) held status quo as widely expected following the conclusion of its two-day monetary policy review meeting on Friday.

The central bank kept the benchmark policy rate on hold at -10bps while maintaining its pledge to buy J-REITS at an annual pace of up to JPY180 bln.

The BOJ, also extended a deadline for its pandemic-relief programme beyond September by six months, in a continued effort to stimulate the fragile economy and tepid inflation.

On the other side, the Eurozone Consumer Price Inflation rate climbed 2.0% in May from 1.6% in April. The reading was the highest since October 2018 and surpassed the central bank’s target. 

Meanwhile, ECB Chief Economist Philp Lane ruled out the possibility of taper talks in the September meeting, emphasizing the central bank’s cautious approach.

EUR/JPY price action has plunged into daily cloud after breaking 50-DMA support. Scope for test of 200-DMA at 127.58.