EUR/JPY oscillates around 139.00 as investors await BOJ policy minutes

• EUR/JPY has turned sideways around 139.00 as the focus has shifted to BOJ policy minutes.
• A deliberate attempt to harm the Nord Stream 1 pipeline will accelerate chaos in the German energy market.
• ECB’s Lane has warned about a decline in corporate profits and wages in crushing price pressures.

The EUR/JPY pair is displaying a lackluster performance in the early Tokyo session as the cross is hovering around 139.00. The asset is expected to re-test the critical support of 137.36, recorded on Monday as the German energy crisis is deepening after a deliberate action to harm the active infrastructure of the Nord Stream 1 pipeline to Germany. Broadly, the asset is witnessing topsy-turvy moves in a narrow range of 138.63-139.54 for the past two trading sessions.

On Tuesday, European Commission chief Ursula von der Leyen cited that the leaks of the Nord Stream pipelines were a result of sabotage, and warned of the "strongest possible response" should active European energy infrastructure be attacked. He further added that any deliberate attempt to demolish an active European energy infrastructure is ‘unacceptable’. The group behind the toxic attempt will face retaliation.

Apart from that, the comments from ECB’s Chief Economist Philip Lane have also dampened the sentiment of Eurozone investors. ECB’s Lane has warned of a decline in corporate profits and a drop in wages in the fight against galloping inflation. However, the inflation rate will start decreasing significantly in 2023, with further decreases in 2024.

Going forward, the yen investors will react to the release of the Bank of Japan (BOJ)’s policy minutes. This will provide a detailed view of the rationale behind the continuation of a dovish stance by the BOJ. Meanwhile, BOJ’s unscheduled bond-buying program has not impacted the yen prices much unlike the prior pattern in which investors used to punish the yen on an occurrence of the same. It seems that the impact of BOJ’s intervention in the currency markets will stay for longer.