EUR/JPY advances towards 140.00 as ECB’s hawkish bets soar

• EUR/JPY is scaling firmly towards 140.00 as a bumper rate hike by the ECB looks imminent.
• Nord Stream 1 pipeline’s unscheduled maintenance may conclude on September 2.
• Next week, Japan’s GDP data will be of utmost importance.

The EUR/JPY pair is marching sharply higher towards the psychological resistance of 140.00. The asset extended its gains in the Asian session after overstepping the hurdle of 139.50. The cross is advancing with a firmer momentum and is expected to remain in the grip of bulls ahead. The shared currency bulls have been underpinned by the market participants amid soaring odds of a ‘hawkish’ stance by the European Central Bank (ECB) next week.

As eurozone has joined the elite club of a 9% inflation rate after the UK and the US, bets for a jumbo rate hike by the ECB have soared vigorously. ECB’s interest rate decision is scheduled for next week and ECB President Christine Lagarde is expected to step up its interest rates to tame the price pressures.

ECB’s Governing Council member and German central bank head Joachim Nagel on Wednesday cited that the ECB “urgently needs to act decisively next week,” He further added that “We need a strong rate hike in September,”

Meanwhile, soaring energy prices are continuously haunting the shared currency bulls. The current halt in energy supplies to Germany through Nord Stream 1 pipeline due to unscheduled maintenance has escalated fears of an energy crisis.

On the Tokyo front, Japanese Finance Minister Shunichi Suzuki has suggested not to focus on regular forex moves. The administration will intervene if it finds a high sense of urgency. Going forward, Japan’s Gross Domestic Product (GDP) data will be keenly watched by the market participants, which will release on Wednesday. In the first quarter of CY22, the GDP data landed at 0.5%.