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Forex - EUR/JPY falls as BoJ easing seen priced into trading

Published 03/28/2013, 02:43 PM
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Investing.com - The euro weakened against the yen on Thursday despite gaining against most other major currencies amid talk that expectations for the Bank of Japan to beef up its monetary stimulus programs have now been priced into trading, which allowed the Japanese currency to firm

In U.S. trading on Thursday, EUR/JPY was down 0.07% at 120.62,  up from a low of 119.75 and off a high of 120.95.

The pair sought to test support at 119.75, the earlier low, and resistance at 121.87, Wednesday's high.

The Bank of Japan will hold a two-day monetary policy meeting beginning April 3, though markets won't be surprised to see a shift towards looser monetary policies.

BoJ Governor Haruhiko Kuroda said recently he wants to stick with monetary easing until inflation rates rise to 2% and added he'd advocate buying even more government debt to reach that goal as part of a policy championed by Prime Minster Shinzo Abe of prioritizing growth over keeping inflation rates in a tight range.

The central banker's words weakened the yen, but by Thursday, however, the Japanese currency found room to rise against the euro despite bullish pressures pushing the single currency up elsewhere.

Demand for the euro held steady as banks in Cyprus reopened with strict capital controls in place.

Financial institutions on the island nation closed on March 16 amid fears of a bank run while bailout talks took place, though calmness held throughout the day as banks opened their doors, which gave the euro room to rise.

The euro, meanwhile, was down against the pound and up against the U.S. dollar, with EUR/GBP trading down 0.05% at 0.8444 and EUR/USD trading up 0.37% at 1.2827.








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