EUR/JPY consolidates around 142.00 ahead of Japan's Inflation
The EUR/JPY pair gave a downside break of the consolidation formed in a minor range of 141.93-142.07 in the early Tokyo session, however, a follow-back reversal has turned the asset sideways again. The asset remained in the grip of bears on Thursday after the IHS Markit reported a downbeat euro zone Purchase Managers Index (PMI) figures.
The IHS Markit reported the Composite PMI at 51.9, significantly lower than the estimates of 54 and the prior print of 54.8. Separate scrutiny of Manufacturing and Services PMI also displayed a vulnerable performance. The Manufacturing PMI landed at 52, much lower than the estimates and the prior print of 53.9 and 54.6 respectively. Also, the Services PMI released extremely lower at 52.8 than the consensus of 55.5 and the former figure of 56.1.
On the Tokyo front, investors are worried over lower demand prospects. The economy has yet not achieved its pre-pandemic growth levels. And now, an expected divergence in the plain vanilla and core Consumer Price Index (CPI) figures is creating headwinds for the economy. The annual CPI is seen at 2.9% much higher than the inflation target of 2% and the prior print of 2.5%. While the core CPI may slip vigorously to 0.4% from the prior print of 0.8%. A divergence in the composite and bifurcated CPI indicates that the price rise is significantly guided by higher fossil fuel and food prices. This means that despite the prolonged ultra-loose monetary policy, the Bank of Japan (BOJ) has failed to spurt the aggregated demand.
Reference by: Investing.com