• EUR/JPY recovers from a multi-month low amid the emergence of some selling around the JPY.
• Bets for a December BoJ rate hike, trade war fears and geopolitical risks could limit JPY losses.
• The setup supports prospects for the emergence of fresh selling around the cross at higher levels.

The EUR/JPY cross gains some positive traction during the Asian session on Thursday and moves away from its lowest level since early October, around the 159.10 region touched the previous day. The intraday uptick lifts spot prices to the 160.00 psychological mark in the last hour and is sponsored by the emergence of fresh selling around the Japanese Yen (JPY).

Any meaningful JPY depreciation, however, seems elusive in the wake of speculations that the Bank of Japan (BoJ) will hike interest rates again in December. Apart from this, US President-elect Donald Trump's tariff threats and geopolitical risks might continue to benefit the safe-haven JPY. This, along with bets for faster interest rate cuts from the European Central Bank (ECB), should act as a headwind for the shared currency and cap the EUR/JPY cross.

From a technical perspective, the recent repeated failures near the 100-period Simple Moving Average (SMA) on the 4-hour chart and a subsequent breakdown below the 162.35-162.30 support favor bearish traders. Moreover, oscillators on the daily chart are holding deep in negative territory and are still away from being in the oversold zone. This suggests that any subsequent move up in the EUR/JPY cross could be seen as a selling opportunity and remain limited.