Snapshot: EUR/JPY remains bid after the Bank of Japan maintained its slow-paced normalisation path overnight, keeping the policy rate target under 1.00%. While spring shunto wage growth supports eventual hikes, Tokyo’s cautious stance leaves the Yen vulnerable as ECB Chief Economist Philip Lane prepares to speak at 13:10 London on the Eurozone economic outlook. This policy divergence keeps the cross supported even as Eurozone core inflation moderates to 2.3%.
- We are watching the 13:10 London address by the ECB’s Philip Lane; any pushback against aggressive back-to-back cuts following the April 25bp reduction to 2.50% will reinforce EUR/JPY support.
- Watch for verbal intervention risk from the Ministry of Finance during the NY session if Yen weakness accelerates, though a constructive global risk backdrop—with WTI crude steady at $95—limits aggressive downside.
Bias into NY: We remain tactically bullish on the cross, targeting a drift toward recent highs near 170.50; the ECB-BOJ policy rate differential of 200bp continues to favor carry-trade expressions while the VIX remains suppressed at 16.2.