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  • EUR/JPY rises for fourth straight day, trades above 119.
  • Risk rally weighs on safe-haven JPY on Thursday.
  • Focus shifts to key macroeconomic data releases from Japan.

The EUR/JPY pair closed the first three days of the week in the positive territory and gained more than 100 pips during that period. After staying relatively quiet during the first half of the day on Thursday, the pair extended its rally and touched its highest level since late March at 119.40. As of writing, EUR/JPY was up 0.75% on the day at 119.38.

EUR capitalizes on risk flows

The market sentiment remains as the primary driver of EUR/JPY’s movements. Major European equity indexes closed the day more than 1% higher and Wall Street pushed higher following a positive opening to reflect the upbeat mood. At the moment, both the S&P 500 and the Nasdaq Composite are up around 1%.

Heightened hopes of global economy staging a recovery in the second half of the year amid easing of coronavirus-related lockdown measures seem to be making it difficult for safe-havens to find demand. 

In the early hours of the Asian session, Unemployment Rate, Industrial Production and Consumer Confidence data from Japan will be looked upon for fresh impetus. Moreover, Retail Trade, Tokyo CPI and Housing Starts figures will be featured in the Japanese economic docket as well. Later in the day, Destatis will release April Retail Sales data for Germany. 

Technical levels to watch for