EUR/JPY attracts some sellers above 158.50 ahead of Eurozone data

• EUR/JPY edges lower to 158.60 in early European session on Friday.
• Japan’s inflation rose faster than expected in October.
• European Central Bank (ECB) ECB maintained the rates unchanged, as widely expected.

The EUR/JPY cross loses ground during the early European trading session on Friday. The cross currently trades around 158.61, up 0.01% for the day. Market players await the Spain’s Gross Domestic Product (GDP) estimated for the third quarter. The quarterly and annual growth numbers are expected to expand by 0.3% and 1.6%, respectively.

The recent Japanese National Consumer Price Index (CPI) data suggested the nation’s inflation rose faster than expected in October. The report is likely to prompt the Bank of Japan (BoJ) to take a more hawkish stance at its upcoming BoJ meeting next week.

Data released by the Japan Statistics Bureau on early Friday revealed that Japan’s CPI came in at 3.3% YoY in October versus 2.8% prior. Meanwhile, CPI ex Fresh Food climbed to 2.7% YoY from 2.5% in the previous reading.

Early Friday, Japan’s Chief Cabinet Secretary Hirokazu Matsuno said that he expects BoJ to implement appropriate monetary policy in order to sustainably and stably meet its price target. Japanese Finance Minister Shunichi Suzuki stated that the excessive FX volatility is undesirable and policymakers will take thorough steps on FX with a strong sense of urgency. Nonetheless, Japanese policymakers declined to comment on the FX level and intervention.

That being said, the BoJ policy meeting next week will be in the spotlight. The hawkish stance from the BoJ or any signal to leave the ultra-accommodative monetary policy might trigger volatility in the market.

On the other hand, the European Central Bank (ECB) ECB maintained the interest rates unchanged as widely expected, snapping an unprecedented streak of 10 consecutive rate hikes on Thursday. During the press conference, ECB President Christine Lagard said the recent data continued to hint to inflation gradually approaching the 2% target. Lagarde added that the risks to economic growth remain tilted to the downside.

Additionally, the escalating geopolitical tensions in the Middle East might dampen market sentiment and boost safe-haven assets like Japanese Yen (JPY). Later on Friday, Spain’s GDP for Q3 will be released. Traders might take cues from the data ahead of the BoJ meeting next week.