EUR/JPY advances towards 143.00, investors await development on BOJ intervention story

• EUR/JPY is marching towards 143.00 as the risk-off traction has been trimmed.
• ECB Lagarde sees interest rates as the most appropriate tool for policy tightening.
• Investors await more development on BOJ’s intervention for further guidance.

The EUR/JPY pair is hovering around the immediate hurdle of 142.60 in the Tokyo session. The asset is auctioning in a range of 142.25-142.60 and is preparing for an upside break as the risk-off impulse is showing fading signs. The cross is marching towards the crucial hurdle of 143.00 as a hawkish commentary from European Central Bank (ECB) President Christine Lagarde has infused fresh blood in the shared currency bulls.

ECB policymaker stated that the Governing Council is having discussions on Quantitative Tightening (QE) and interest rate is the most appropriate tool in current circumstances. As price prices are soaring in the trading bloc and have not displayed any sign of exhaustion yet, the continuation of restrictive policy measures is highly likely.

On the Tokyo front, the odds of intervention in the currency markets by the Bank of Japan (BOJ) for the second time are mounting. Japanese officials believe that the current yen price doesn’t justify economic fundamentals. It is worth noting that the USD/JPY pair has surpassed the area where BOJ intervened last month.

Japanese Chief Cabinet Secretary Hirokazu Matsuno denied on commenting over day to day movement in the FX domain but cited that “We are closely watching FX moves with a high sense of emergency and will take appropriate steps on excess FX moves. The commentary came after the USD/JPY pair refreshed its multi-year high at around 146.40.