EUR/JPY marches towards 140.00 on hawkish ECB bets, Eurozone Retail Sales eyed

• EUR/JPY is advancing towards the psychological resistance of 140.00 ahead of eurozone Retail Sales.
• The ECB is expected to feature a rate hike to contain the inflationary pressures.
• A wage hike should be accompanied by a price rise to sustain inflation at desired levels.

The EUR/JPY pair has given an upside break of its trading range placed in a 139.40-139.61 bracket in the Asian session. The cross remained vigorously strong on Thursday amid broader weakness in the Japanese yen. Gains were extended by the cross on Thursday after the asset overstepped the round-level resistance of 139.00. The asset is prepared to re-test Aril’s high at 140.00.

The spotlight has been shifted to the shared currency bulls as investors are awaiting the announcement of the interest rate decision by the European Central Bank (ECB) next week. The investing community is expecting that the ECB will advance the rate cycle for the first time since the pandemic.

Unlike, the other Western leader, the ECB has not elevated its interest rates. However, a hawkish stance by the ECB policymakers looks likely as the Eurozone Harmonized Index of Consumer Prices (HICP) has increased sharply. The inflation rate is stabilized above 8% and is eating the wallets of the households.

In today’s session, eurozone Retail Sales will hog the limelight. The monthly and annual Retail Sales are expected to climb to 0.3% and 5.4% respectively.

On the Japanese yen front, the Bank of Japan (BOJ) policymakers are worried over the lower inflation rate in their respective region. The BOJ seeks wage hikes along with price rises to stabilize the inflationary pressures at desired levels.