EUR/JPY REMAINS WELL OFFERED NEAR ONE-MONTH LOW, HOLDS ABOVE 170.00 MARK
- EUR/JPY drifts lower for the third straight day amid some follow-through JPY buying.
- A suspected intervention and rising bets for another BoJ rate hike underpin the JPY.
- A weaker USD benefits the Euro and might help limit losses amid a positive risk tone.
The EUR/JPY cross trades with a negative bias for the third successive day on Tuesday, albeit manages to hold above the 170.00 psychological mark, or a nearly one-month low touched last week.
The Japanese Yen (JPY) continues to draw support from expectations the Bank of Japan (BoJ) could hike interest rates again at its upcoming policy meeting and a suspected intervention from authorities to prop up the domestic currency. Adding to this, the US political uncertainty drives some haven flows towards the JPY and turns out to be a key factor exerting downward pressure on the EUR/JPY cross.
Meanwhile, the European Central Bank (ECB) downgraded its view of the Eurozone's economic prospects and predicted that inflation would keep falling, leaving the door for a rate cut in September wide open. This contributes to the shared currency's relative underperformance and the offered tone surrounding the EUR/JPY cross, though a combination of factors could help limit deeper losses.
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