EUR/JPY extended recovery above 141.60 as Japan-North Korea tensions escalate

• EUR/JPY has advanced to near 141.80 as geopolitical tensions have escalated.
• Till now, North Korea has fired seven ballistic missiles near Japan Pyongyang.
• European consumers see inflation at 5% in the next 12 months.

 The EUR/JPY pair rebounded from below 141.50 in the early Tokyo session and now has extended gains to near 141.70. The cross is picking significant bids amid escalating geopolitical tensions between Japan and North Korea. Broadly, the asset witnessed a steep fall after dropping below the cushion of 142.50 last week.

The risk sentiment is turning positive a bit but caution is still intact. The continuous firing of ballistic missiles by North Korea around the Japan region without prior notice of training or equipment testing has already termed the military action as an issue of breaching the harmony of Japan.

On Sunday, North Korea fired two ballistic missiles, making it a total of seven, launched around Pyongyang. The military event by North Korea forced Japan, South Korea, and the US to conduct their own military drills in response to military activities from the Kim Yong-un region.

Meanwhile, the statement from North Korean leading Kim stated that their administration need not have a dialogue with the economy and the former will continue to strengthen its nuclear operations ahead, as reported by Reuters.

On the Eurozone front, the latest study published by the European Central Bank (ECB) on Friday said, “surging consumer demand across the eurozone is playing an increasing role in excessive inflation.” However, European consumers see inflation in the next 12 months at 5%.

Apart from that, subdued German Retail Sales data still grips a hangover on the trading bloc. The annual Retail Sales declined by 4.3% but remained better than the expectations of a decline of 5.1%. While the monthly catalyst declined by 1.3% than the projections of a drop by 1%.