EUR/JPY slides towards 156.00 on downbeat German Industrial Production, Japan meddling woes

• EUR/JPY prints four-day losing streak, braces for the first weekly loss in four.
• German Industrial Production for May disappoints, Japan wage numbers came in firmer.
• Fears of BoJ, Japan government intervention to defend Yen soar of late, firmer yields fail to propel EUR/JPY.
• More comments from ECB’s Lagarde, yields and risk catalysts eyed for clear directions.

EUR/JPY renews its intraday low around 156.25, portraying the four-day losing streak heading into Friday’s European session.

The cross-currency pair’s latest weakness could be linked to the downbeat German data, as well as the market’s risk-off mood, and the concerns about Japan’s intervention to defend the Yen (JPY). In doing so, the quote ignores hawkish comments from European Central Bank (ECB) President Christine Lagarde while failing to justify dovish bias at the Bank of Japan (BoJ).

Germany’s Industrial Production for May shrinks by 0.2% MoM versus the market expectations of posting 0.1% growth. That said, industrial Production grew 0.3% in April.

On the other hand, ECB President Lagarde defends her hawkish bias while saying, “We still have work to do to bring inflation back down to our target.”

It should be noted that Japanese officials have repeatedly shown readiness to take measures to defend the Yen in case of severe moves after the Asian currency refreshed yearly tops in the last week. Additionally favoring the JPY is the early-day release of firmer Japan wage growth data for May, as well as recently published upbeat preliminary figures of the Coincident Index and Leading Economic Index for May.

Furthermore, talks of the BoJ’s exit from easy monetary policy and the Yield Curve Control (YCC) have also gained major attention of late and weigh on the EUR/JPY prices, even if the BoJ officials have ruled out the need for any such measures in the near term.

Amid these plays, the US stock futures and Asia-Pacific shares remain pressured while tracing Wall Street’s losses. Further, the Treasury bond yields edge higher following a run-up to refresh a three-month top by the US 10-year and two-year bond coupons.

Looking ahead, a speech from ECB President Christine Lagarde is up for release during the US session and will direct the intraday EUR/JPY moves. Before that, the risk catalysts and BoJ chatters may entertain the momentum traders.

Technical analysis

A daily closing beneath the previous resistance line stretched from late February, around 157.05 by the press time, directs EUR/JPY bears towards the 155.35-30 support confluence comprising the 21-DMA and tops marked during June 18-20.