EUR/JPY seeks cushion around 138.70 after a mild correction, Eurozone GDP in focus

• EUR/JPY is looking for a cushion as odds of soaring energy prices have resulted in a mild correction.
• The consensus for Eurozone GDP is lower at 3.4% vs. 5.4% recorded earlier.
• BOJ’s ultra-loose monetary policy will keep poking the yen bulls.

The EUR/JPY pair is attempting a cushion around 138.70 after a mild correction from above 139.00. The asset failed to sustain above the critical hurdle of 139.00 as the energy crisis escalated in Germany. The major has surrendered half of its intraday gains after the comments from Klaus Mueller, head of the Bundesnetzagentur regulator, a German gas regulator warned on Wednesday that consumers must prepare for more energy price increases.

The energy crisis has accelerated in the core member economy of the European Union (EU), Germany after Russia cut off the energy supply to the eurozone from its main supply line. The unwarranted reasons by the Russian administration for gas supply cuts have created havoc for the energy market in the bloc.

It is worth noting that Germany has a significant dependency on Russian energy imports and a lower supply of energy in times when the winter season is on the door could trigger recession fears. Lower oil and gas stockpiles may accelerate the jobless rate. The EU is actively looking for alternative candidates who will address the bumper energy demand in Europe. However, the execution demands plenty of time.

Apart from that, a lower consensus for eurozone GDP numbers will keep poking the shared currency bulls. The economic data is seen lower at 3.4% than the prior release of 5.4% on an annual basis.

Meanwhile, the Japanese yen is facing the headwinds of ultra-loose monetary policy, which is operated by the Bank of Japan (BOJ) for a prolonged period. The BOJ is committed to keeping the inflation rate above 2% and it demands a higher wage price index as a combination of the same will spurt the overall demand in the economy.