EUR/JPY Below 120 Before ECB Meeting

The euro was near a five-week low against the yen amid speculation the European Central Bank will use its meeting tomorrow to signal future economic stimulus.

The yen snapped a decline as the Bank of Japan (8301) starts a two-day gathering at which it’s expected to increase monthly bond purchases to combat deflation. The Australian dollar remained higher following a three-day advance after global stocks gained, boosting demand for higher-yielding currencies.

“A rate cut is still an option for the ECB, so we can’t willingly buy the euro yet,” said Yoshitsugu Fujita, an assistant vice president of global markets in New York at Sumitomo Mitsui Trust Bank Ltd. “Traders want to close their long dollar-yen positions before the BOJ meeting, which is a big event.”

The euro slid 0.1 percent to 119.67 yen as of 8:25 a.m. in Tokyo after touching 119.15 yesterday, the lowest since Feb. 26. The 17-nation currency traded at $1.2817 following a 0.2 percent decline to $1.2820. The yen was at 93.37 per dollar after losing 0.2 percent to 93.44.

Bloomberg

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Stuart McPhee

Stuart McPhee

Senior Currency Technical Analyst at Market Pulse
Stuart McPhee has nearly 20 years’ experience as a private trader and he specializes in technical market analysis of major currency pairs. He is the author of several bestselling trading books, most recently the fourth edition of his popular book “Trading in a Nutshell” (John Wiley), and he contributes articles to daily newsletters and blogs. He produces articles and videos on the how-tos of technical trading. Living in Melbourne, Australia, Stuart speaks at conferences and events worldwide.
Stuart McPhee