- EUR/JPY has recovered from session lows but is flashing marginal losses.
- Yen is showing resilience despite dovish comments by BOJ’s Kuroda.
- Technical charts show 122.50 is the level to beat for the bulls.
EUR/JPY has recovered from session lows but remains below key resistance at 122.50 with markets refusing to offer yen despite dovish comments by Bank of Japan’s governor Kuroda.
The pair is currently trading near 122.35, representing marginal losses on the day, having hit a low of 122.20 earlier today.
Kuroda reiterates dovish bias
BOJ’s Kuroda was out on the wires a few minutes before press time, stating that the central bank would not hesitate to take additional easing steps if required.
The central bank head added further that long-term rates will remain at current or lower levels alongside QQE with yield curve control for an extended period.
So far, however, Kuroda’s dovish talk has been ignored by markets. Moreover, the bank’s dovish bias is already well known and priced in.
Focus on EU-US trade tensions
European Union’s new trade chief Phil Hogan is due to meet US Trade Representative Robert Lighthizer and other American officials during a Jan. 14-16, according to Bloomberg.
The two sides will be looking to settle old disputes that have been revived recently and the fundamental disagreement over trade policy.
Hosuk Lee-Makiyama, director of the European Centre of International Political Economy in Brussels, thinks there will be a lot of fireworks before any underlying progress is made in resolving U.S.-EU policy differences over trade.
The uncertainty could weigh over the single currency.
122.50 is a key hurdle
The pair has faced rejection at or above 122.50 multiple times over the last four weeks.
On Tuesday, the JPY ran into offers around 122.76 and closed at 122.38, marking a bullish failure above 122.50.
So, 122.50 is the level to beat for the bulls. A close higher would imply a continuation of the rally from September lows near 116.00.