Forex - EUR/JPY at 33-month highs ahead of ECB’s Draghi


Shutterstock photo - The euro was trading at 33-month highs against the yen on Thursday, ahead of remarks by European Central Bank President Mario Draghi later in the day, as expectations for more easing continued to pin down the yen.

EUR/JPY hit 127.45 during European morning trade, the session high; the pair subsequently consolidated at 127.38, gaining 0.61%.

The pair was likely to find support at 126.02, the session low and resistance at 129.50.

Demand for the euro was underpinned by optimism that the debt crisis in the euro zone has turned a corner after recent economic data pointed to signs of a recovery in the region.

Market participants remained cautious ahead of remarks by President Draghi at the bank's post-policy meeting press conference, amid wariness that he could express concerns over the impact of the stronger euro on the economic recovery.

The ECB was widely expected to leave interest rates unchanged at 0.75% on Thursday.

The yen remained broadly weaker as expectations for more aggressive monetary easing weighed.

Earlier this week, BoJ Governor Masaaki Shirakawa said he was stepping down three weeks before the conclusion of his five year term on April 8, along with his two deputy governors.

The move is likely to push forward a transition towards more aggressive monetary easing, amid ongoing pressure from Prime Minister Shinzo Abe to step up measures to combat deflation.

Prime Minister Abe is expected to nominate a new governor later this month.

Elsewhere, the euro was higher against the dollar, with EUR/USD up 0.34% to 1.3565 and was slightly lower against the pound, with EUR/GBP dipping 0.04% to 0.8634.

Sentiment on sterling remained subdued as incoming Bank of England Governor Mark Carney testified before a U.K. parliamentary committee in London. The BoE was to announce its benchmark interest rate later in the day.

Earlier Thursday, official data showed that manufacturing production rose 1.6% in December, double expectations for a 0.8% increase, while industrial production increased by 1.1%, compared to expectations for a 0.9% rise.

A separate report showed that the U.K. trade deficit narrowed to GBP8.9 billion in December, in line with expectations from a revised deficit of GBP9.3 billion the previous month. - offers an extensive set of professional tools for the Forex, Commodities, Futures and the Stock Market including real-time data streaming, a comprehensive economic calendar, as well as financial news and technical & fundamental analysis by in-house experts.
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