EUR/JPY fell to the mid-¥177 range as the yen strengthened at the end of last week, but rebounded at night. This week, the order book and correlation analysis will be among the key factors to watch.
EUR/JPY was flat during the day last Friday, then the yen strengthened from late afternoon into the evening, and the pair ended trading with a sixth consecutive daily decline. The euro area consumer price index came in slightly above market expectations, but the short-term reaction was limited. Comments by Economic and Fiscal Policy Minister Kiuchi (城内) indicated that there was no need for extraordinary monetary easing.
In the technical analysis released today, the order book showed particularly heavy buy orders near ¥176, with additional heavy buying in the mid-¥176 range, while heavy sell orders in the upper ¥180s are being watched as resistance. Heavy selling was also seen in the lower ¥179s.
In the correlation analysis of EUR/JPY and other currency pairs, USD/JPY and GBP/JPY showed a correlation over the past 24 hours, while AUD/JPY and EUR/USD had weak correlations and AUD/USD had a weak inverse correlation. The yen was slightly in negative territory as of the morning.
Key factors to watch this week include PMIs and retail sales and inflation indicators from various countries, the US ISM Non-Manufacturing Index and the FOMC minutes. EUR/JPY may be affected depending on the results of these indicators.