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The EUR/JPY cross pares recent gains to around 163.35 during the early European trading hours on Wednesday. The Euro (EUR) faces some selling pressure after the Germany’s economic data. However, the downside for the cross might be limited amid the uncertainty about the timing of the Bank of Japan’s (BoJ) next interest rate hike.
Data released by the Federal Statistics Office on Wednesday showed that Germany’s Factory Orders unexpectedly slumped in November, highlighting the industry’s woes just weeks before Chancellor Olaf Scholz faces elections. German Factory Orders fell by 5.4% MoM in November, compared to a decline of 1.5% in the previous reading. This figure came in weaker than the 0% expected. The shared currency weakens against the Japanese Yen (JPY) in an immediate reaction to the downbeat German data.
Furthermore, the verbal intervention by Japanese authorities and the risk-off mood amid concerns about the ongoing geopolitical tensions in the Middle East could boost the safe-haven currency like the JPY and act as a headwind for EUR/JPY. On the other hand, the uncertainty surrounding the BoJ’s monetary policy next move might keep the JPY at a relatively weak level. BoJ Governor Kazuo Ueda said on Monday that the central bank will raise the policy interest rate to adjust the degree of monetary easing if economic and price conditions keep improving.More By This Author:USD/CAD Holds Positive Ground Above 1.4350 On Bullish US Dollar, FOMC Minutes In Focus USD/CHF Holds Below 0.9050 On Trump Tariff Confusion EUR/USD Price Forecast: The Path Of Least Resistance Is To The Downside Near 1.0300
