The Euro seeks to end the week’s exchanges with the Japanese yen on a bullish note as risk confidence hikes in the financial markets. Corporate updates on fourth quarter earnings, as well as stronger-than-expected US economic data yesterday are buoying investor sentiment. On the other hand, expectations for additional easing by the Bank of Japan are hurting the valuation of the Samurai currency.
Things are looking bright for the Euro Zone, after International Monetary Fund Chief Christine Lagarde acknowledged that Greece had made progress with economic reforms. The IMF board has recently agreed to pay the next aid tranche to Athens under the country’s 240-Billion-Euro international bailout, though Lagarde urged the indebted nation to do more to boost productivity and lower prices.
In a sign of positive prospects for the 17-member nation currency, European equities closed higher yesterday, and are anticipated to do so again today. A boost from the US jobless claims and the housing starts reports also provide further reason to take on the risks of investing in the Euro.
Meanwhile in the Asian front, Japanese Finance Minister Aso said in Tokyo today that the Bank of Japan and the Japanese government will issue a joint statement at the central bank’s January 21-22 meeting. BOJ Governor Masaaki Shirakawa noted that he exchanged opinions at the meeting with Aso and Amari.
As advocated by Prime Minister Shinzo Abe, the central bank will adopt the 2 percent inflation target next week, effectively doubling the existing goal of 1 percent, people familiar with BOJ officials’ discussions have told Bloomberg News. Reuters reported the BOJ could even pledge asset buying until the 2 percent inflation target is foreseen.
With the market sentiment pushing for risk taking today, a buy position is advised for the EURJPY. Nevertheless, be cautious of the probable technical corrections in the day’s trades.
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