EUR/JPY extends its upside above the 158.50 mark, German CPI eyed

• EUR/JPY gains momentum for four straight days above the 158.50 mark.
• Japanese Unemployment Rate rose to 2.7% in July versus 2.5% in the previous month.
• Investors will focus on German Consumer Price Index (CPI), Eurozone CPI, ECB meeting minutes.

The EUR/JPY cross extends its upside and trades in positive territory for the fourth consecutive day during the early Asian session on Tuesday. The cross currently trades around 158.60, gaining 0.04% on the day. A rise in the Japanese Unemployment Rate and the hawkish comments from European Central Bank (ECB) policymakers exert some pressure on the JPY.

On Monday, French Finance Minister Bruno Le Maire denied cutting interest rates in the near future. The policymaker added that they need to see inflation pressure in the services sector. Meanwhile, European Central Bank (ECB) policymaker Joachim Nagel said that he was unable to tell whether the ECB should raise interest rates at its September meeting.

Apart from this, ECB President Christine Lagarde stated at the Jackson Hole Symposium that the battle against inflation is not yet won. She emphasized the importance of central banks providing an economic nominal anchor and ensuring price stability while setting interest rates at restrictive levels for as long as it takes to achieve inflation to the ECB's medium-term target of 2%. The ECB’s hawkish stance boosts the Euro and acts as a tailwind for the EUR/JPY cross.

The latest data released by the Japan Statistics Bureau revealed that the nation’s Unemployment Rate rose to 2.7% in July versus 2.5% in the previous month and expected. The figure rose for the first time in four months and exerted pressure on the Bank of Japan (BoJ) and the government.

Governor Kazuo Ueda of the BoJ stated at a Federal Reserve symposium on Saturday that the central bank considers underlying inflation to be below its objective and will therefore maintain the current ultra-loose monetary policy framework. Policymakers stated that domestic demand remained robust and company fixed investment was sustained by record high profits. That said, the divergence in monetary between the ECB and the Bank of Japan (BoJ) might cap the upside in the Japanese Yen against its rivals,

Moving on, market participants will monitor the top-tier data from the Eurozone for fresh impetus. The German Consumer Price Index (CPI) data will be released on Wednesday, followed by the German Retail Sales and Eurozone CPI data due on Thursday. Furthermore, the ECB will release its meeting minutes on Thursday. On the Japanese docket, the Consumer Confidence Index for August, Industrial Production, and Retail Sales will be due later this week.