EUR/JPY pokes weekly top below 138.00 as Japan returns from holiday

• EUR/JPY rises for the fourth consecutive day as strong yields weigh on yen during the full markets.
• Downbeat German data, strong Tokyo CPI fail to stop buyers.
• US jobs report, risk catalysts will be crucial for short-term directions.

EUR/JPY picks up bids to refresh intraday high around 137.60, approaches weekly top during the active Asian session on Friday.

The cross-currency pair’s latest gains could be linked to the firmer US Treasury yields, which usually weigh on the JPY prices. Also likely to have favored the EUR/JPY buyers is the monetary policy divergence between the European Central Bank (ECB) and the Bank of Japan (BOJ).

It’s worth noting that the EUR/JPY advances recently ignore strong Tokyo Consumer Price Index (CPI) data for April, 2.5% YoY versus 1.9% expected and 1.3% prior. Also likely to have challenged the pair’s upside, but did not, was the disappointment from German Factory Orders. The key industrial activity data from the European powerhouse slumped the most in five months with a -4.7% figure the previous day, versus -1.1% expected and revised up prior release of -0.8%.

While portraying the mood, the S&P 500 Futures drops 0.33% whereas the US 10-year Treasury yields rose five basis points (bps) to 3.07% at the latest.

Moving on, a light calendar in Europe and Japan may not disappoint EUR/JPY momentum traders as the US jobs report and risk catalysts are in full steam to move the markets.

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Technical analysis

Unless dropping back below the 21-DMA level surrounding 137.00, EUR/JPY remains directed towards a late April swing low near 138.25-30.