EUR/JPY rebounds from 136.20 but is still inside the woods

• EUR/JPY bounces from 136.20 but seeks a potential trigger for further direction.
• ECB policymakers voted in favor of an unchanged interest rate policy.
• An interest rate hike by the ECB will take place after concluding the APP.

The EUR/JPY pair has been bounced after a minor pullback towards 136.20 in early Tokyo. The asset has been oscillating in a range of 135.50-137.20 the whole week. The cross has failed to find any direction despite the monetary policy announcement by the European Central Bank (ECB) on Thursday.

ECB President Christine Lagarde has preferred to continue with a neutral stance for now. The majority of ECB policymakers voted in favor of maintaining the status-quo and left the interest rates unchanged. However, the dovish guidance by the ECB has dampened the broader demand for the shared currency. The postponement of interest rate elevation till the time ‘Asset Purchase Program’ (APP) gets concluded sounds like an interest rate hike may be in the last quarter of this year.  As per the comments from ECB’s Lagarde, APP will conclude in June.

It wouldn’t be wrong to say that the stagnant growth rate in the eurozone amid the Ukraine crisis has put the ECB in dilemma. The ECB seems in trouble between tackling the soaring inflation and supporting the overall growth.

Next week, investors will focus on Japan’s yearly National Consumer Price Index (CPI) numbers, which are likely to land at 1.3% against the previous figure of 0.9%. On the Euro front, Eurostat will report Core CPI, which is expected to print at 3%.