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4 Dec 2014
EUR/JPY coming off but holding in positive territory
FXStreet (Barcelona) - EUR/JPY is trading at 148.67, up 0.80% on the day, having posted a daily high at 148.98 and low at 147.30.
EUR/JPY has started to come off from the highs seen when the ECB instigated a rally in the single currency. Markets had been prepared for some convincing rhetoric from the ECB’s meeting today in respect to further QE policy but the ECB failed to deliver on that and came instead with a wait and see approach.
Draghi basically told the markets that there were no decisions made towards plans for a sovereign QE programme and there is more analyses required. It will not be until early next year that the Governing Council will reassess the monetary stimulus achieved, the expansion of the balance sheet and the outlook for price developments, thus the cross is well bid...however...
The Euro was on the back foot to begin with on initial comments and in Draghi;s initial opening statement in respect to QE that the market took the wrong way when the mention of previous buying of bonds was said and that sent the USD/JPY through 120.00. When the market got the ECB the right way around, then of course this took EUR/JPY to another level altogether.
It could be warned that the USD/JPY price level may attract corporate selling interest hedging on a forward basis through 120.00, especially locking in treasury requirements ahead of the Nonfarm Payrolls tomorrow. However, a wait and see mode from the ECB is unlikely to be very positive for European stocks which may damage the value of the euro, but could add support to the Yen.
EUR/JPY has started to come off from the highs seen when the ECB instigated a rally in the single currency. Markets had been prepared for some convincing rhetoric from the ECB’s meeting today in respect to further QE policy but the ECB failed to deliver on that and came instead with a wait and see approach.
Draghi basically told the markets that there were no decisions made towards plans for a sovereign QE programme and there is more analyses required. It will not be until early next year that the Governing Council will reassess the monetary stimulus achieved, the expansion of the balance sheet and the outlook for price developments, thus the cross is well bid...however...
The Euro was on the back foot to begin with on initial comments and in Draghi;s initial opening statement in respect to QE that the market took the wrong way when the mention of previous buying of bonds was said and that sent the USD/JPY through 120.00. When the market got the ECB the right way around, then of course this took EUR/JPY to another level altogether.
It could be warned that the USD/JPY price level may attract corporate selling interest hedging on a forward basis through 120.00, especially locking in treasury requirements ahead of the Nonfarm Payrolls tomorrow. However, a wait and see mode from the ECB is unlikely to be very positive for European stocks which may damage the value of the euro, but could add support to the Yen.