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Investing.com - The euro shot up against the yen on Tuesday after eurozone service-sector data beat market calls.

A decision by Bank of Japan Governor Masaaki Shirakawa to step down on March 19, three weeks before he was otherwise scheduled to do so, further weakened the yen against the single currency.

In U.S. trading on Tuesday, EUR/JPY hit 127.06, up 1.78% and up from a low of 124.03 and off a high of 127.20.

The pair sought to test support at 124.03, the earlier low, and resistance at 127.20, the earlier high.

Shirakawa's exit fueled growing expectations that Japanese Prime Minister Shinzo Abe will name a replacement who favors loosening policy to prioritize growth over inflation, which would weaken the yen.

Meanwhile, the euro rose after the Markit research group reported that the eurozone services purchasing managers' index rose to 48.6 in January, beating market expectations for a reading of 48.3.

Elsewhere, the European Central Bank is scheduled to meet later this week to analyze policy, and expectations that monetary authorities will make no changes bolstered the euro even more on Tuesday, though weak eurozone retail sales figures dampened spirits slightly.

Eurozone retail sales dropped 0.8% in December, much worse than market calls for a 0.5% contraction.

The euro, meanwhile, was up against the pound and up against the Canadian dollar, with EUR/GBP trading up 1.22% at 0.8678 and EUR/CAD trading up 0.26% at 1.3533.

On Wednesday in the eurozone, Germany is to release official data on factory orders, a leading indicator of production.








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