EUR/JPY establishes above 142.00 despite upbeat Japanese data, German Retail Sales in focus

• EUR/JPY has stabilized above 142.00 on soaring hawkish ECB bets.
• The yen bulls have failed to capitalize on upbeat Japanese economic data.
• Eurozone Consumer Confidence has remained in line with estimates and German Retail Sales may plunge ahead.

The EUR/JPY pair has displayed a juggernaut rally after overstepping the round-level hurdle of 140.00. The asset is moving north vertically and has established above the immediate resistance of 142.00 in the Asian session. The cross has not sensed any selling pressure despite the release of upbeat Japanese economic data.

Japan’s Unemployment Rate has justified the estimates of 2.5% and remained lower than the prior release of 2.6%. While the Jobs/Applicants Ratio improved to 1.32 vs. the forecasts of 1.30 and the former print of 1.29.

Adding to that, the Retail Sales data has improved significantly to 4.1%, higher than the forecast of 2.8% and the prior figure of 2.4%. The retail demand seems upbeat in the Japanese economy, which is a result of the continuous injection of liquidity into the economy by the Bank of Japan (BOJ). The BOJ believes that the economy needs stimulus to revive the growth rate recorded in the pre-pandemic era. Also, Industrial Production has accelerated to 5.1% from a decline of 2% on an annual basis.  

Meanwhile, the shared currency bulls are performing well after the hawkish commentary by the European Central Bank (ECB) President Christine Lagarde. The ECB is expected to tighten its policy further as it has come with specified guidance. The ECB will hike its interest rate by 125 basis points (bps) in the coming monetary policy meeting.

On the economic front, the Eurozone Consumer Confidence has remained in line with the estimates and the prior release but is still worse at -28.8. Going forward, the German Retail Sales data will catch the spotlight. The economic data is expected to decline firmly by 5.1% vs. the prior release of a decline of 2.6% on an annual basis.