EUR/JPY tumbles to near 136.00 on downbeat consensus for German PMI

• EUR/JPY has displayed a vertical fall to near 136.00 as investors have turned risk-averse ahead of German PMI.
• The unscheduled maintenance of the Nord Stream 1 pipeline may impact the German energy market.
• Investors have ignored the lower-than-expected Japan PMI data.

The EUR/JPY pair has witnessed a sheer downside move after facing barricades around 136.60. The asset has refreshed its day’s low at 136.12 and is expected to decline further on downbeat forecasts for Germany’s Purchasing Managers Index (PMI) data. Investors are turning risk-averse and are discounting the German PMI, which is expected to remain vulnerable due to a combination of factors such as soaring inflation, supply chain risks, and the energy crisis in the eurozone.

As per the market forecasts, the German S&P Global/BME Manufacturing PMI data will release at 48.3, lower than the prior release of 49.3. While the Services PMI will land lower at 49 than the former release of 49.7.

Also, the German Manufacturing PMI is on a declining spree since February. More downside in the German PMI could bolster the odds of a recession in Germany. Investors should be aware of the fact that Germany is a core member of the European Union (EU) and a situation of recession in Germany will have a significant impact on the shared currency.

Adding to that, the shared currency bulls are also facing the heat of the upcoming energy crisis in Germany. Nord Stream 1 pipeline will go through unscheduled maintenance in the last three days of August, which will accelerate the already vulnerable energy market in Germany.

Meanwhile, investors have ignored a decline in Japan’s PMI data. Japan’s Jibun Bank Manufacturing PMI has landed at 51, lower than the expectations and the prior release of 51.8 and 52.1 respectively. Also, Services PMI remained vulnerable at 49.2 from the consensus of 50.7 and the former figure of 50.3.