EUR/JPY to recapture 137.00 ahead of Japan’s GDP and Eurozone HICP

• EUR/JPY may continue its three-day winning streak amid a rebound in the risk-on impulse.
• The odds of a rate hike by the ECB in July have risen strongly.
• In today’s session, Eurozone HICP and Japan’s GDP will remain in focus.

The EUR/JPY pair is hovering around 136.50 in the early Asian session after a bullish Tuesday. The cross witnessed some significant bets from the market participants as investors underpinned risk-on impulse in the global market. The asset has displayed a three-day winning streak and is likely to continue further amid a firmer market mood.

The shared currency bulls are performing strongly against the Japanese yen on strong Gross Domestic Product (GDP) numbers. The annual figure has landed at 5.1%, a little higher than the former figure of 5%. Apart from that, Employment Change in the eurozone failed to keep up with the forecasts. The Employment Change landed at 2.6%, lower than the estimates of 2.7%. Going forward, investors will keep an eye on the HICP number by the Eurostat. The yearly HICP figure is seen as stable at 7.5%.

The shared currency bulls got extra mileage on Tuesday amid rising hopes of a 25 basis point (bps) rate hike in July. European Central Bank (ECB) Governing Council member Klaas Knot, speaking on Dutch TV, claimed that mounting price pressures could open doors for a 50 bps rate hike, however, a quarter-to-a-percent seems more realistic.

Meanwhile, the yen bulls are awaiting the release of the GDP numbers on Wednesday. The annual GDP figure is expected to release at -1.8%, against the previous figure of 4.6%. While the quarterly figure may decline to -0.4% in comparison with the prior print of 1.1%.