EURJPY has seen some moves today. Confirmation hearings from Kazuo Ueda, who is set to replace Kuroda as BoJ chief, provided JPY-volatility while the disappointing final release of German Q4 2022 GDP put pressure on EUR.
Remarks from Ueda have been quite interesting. While many hoped that he would tout a change in BoJ policy, namely a gradual exit from monetary easing, Ueda refrained from making big statements. He said that he sees inflation as peaking but unless there is a material improvement in inflation trends, yield curve control (YCC) will have to remain in place. However, he addressed calls for tweaking YCC saying that switching focus to a shorter-dated yields (down from current target 10-year yield) remains an option. However, the general feeling of his speech was that he wants to continue with monetary easing and the YCC started by his predecessor.
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Create account Try a demo Download mobile app Download mobile appRevision of German data on Q4 2022 GDP was released today at 7:00 am GMT and turned out to be a disappointment. German GDP shrank by 0.4% QoQ in Q4 2022 (first release: -0.2% QoQ) while growth on an annual, working day adjusted basis reached 0.9% YoY (first release: 1.1% YoY). Poor showing of the German economy in Q4 2022 was driven by a 1% QoQ plunge in private consumption as well as 2.5% QoQ slump in capital investments. A 0.6% QoQ increase in government spending was not enough to offset drops elsewhere.
Taking a look at EURJPY chart at F1 interval, we can see that the price has recently tested 144.00 resistance zone but failed to break above. A pullback was launched later on and EURJPY deepened drop during today's BoJ official hearings. However, bulls managed to fully recover from earlier declines, painting a bullish candlestick pattern near 142.60 swing level. Technical picture suggests that another test of the aforementioned 144.00 area may be looming.
Source: xStation5
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