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The Yen is dropping across the board on Monday weighed by reports that have cooled off hopes the bank might signal the exit of its ultra-loose policy after next week’s meeting.
BoJ officials cool hopes of an exit from negative ratesMarket sources reported that Bank of Japan officials see little need to end the negative rates policy. This has poured cold water on the market expectations that the bank would approve a major shift at its December 19 meeting, and has sent the Yen tumbling across the board.
In the absence of relevant macroeconomic data today, this news, combined with the higher US yields following the strong US employment data seen last week, is likely to keep the JPY on the back foot in the coming sessions.
EUR/JPY seen below 150.00 early next year – MUFGFrom a wider perspective, the Technical team at MUFG sees trending lower over the next weeks: “Weak fundamentals make it harder for to push back against market expectations for earlier and deeper rate cuts next year (…) We expect EUR weakness to be more pronounced against the JPY resulting in EUR/JPY falling back below the 150.00 level by early next year.”
Technical levels to watchEUR/JPY
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