EUR/JPY extends losses to near 164.50 amid Japan’s intervention fear

• EUR/JPY continues to lose ground amid potential market intervention by Japanese authorities.
• BoJ data showed that Japanese authorities possibly expended approximately ¥6.0 and ¥3.66 trillion on Monday and Wednesday, respectively, to bolster the JPY.
• ECB Chief Economist Philip Lane underlined the central bank's commitment to maintaining a data-dependent approach.

EUR/JPY extends its losses for the third consecutive session, trading around 164.60 during the European session on Friday. The Japanese Yen (JPY) strengthened on Friday following a rally on Thursday attributed to potential Japanese government intervention, marking the second such incident this week, according to a Reuters report. It is worth noting that Japanese banks will be closed due to Greenery Day on Friday.

Reuters reported that the Bank of Japan (BoJ) data showed on Thursday that Japanese authorities possibly expended approximately ¥3.66 trillion on Wednesday to bolster the JPY. Earlier in the week, on Monday, Japan's Ministry of Finance intervened in the market, potentially investing around ¥6.0 trillion to support the Japanese Yen. Masato Kanda, Japan's top currency diplomat, refrained from directly confirming the intervention but mentioned that the Ministry of Finance intends to disclose related data by the end of the month.

On Thursday, the Bank of Japan (BoJ) released Minutes from the March meeting with insights into the monetary policy outlook. One member noted that the economy's reaction to a short-term rate increase to approximately 0.1% is expected to be minimal. Additionally, several members believed that market forces should primarily determine long-term rates.

In the European Union, the Unemployment Rate, as reported by Eurostat, remained unchanged at 6.5% in March, aligning with market forecasts and consistent with the preceding three months. The figure reflects a decline of 94,000 unemployed individuals compared to the previous month, bringing the total to 11.08 million.

During a virtual guest lecture at Stanford University on Thursday, European Central Bank (ECB) Chief Economist Philip Lane noted that although inflation has declined more rapidly than initially projected by the ECB, the transmission of policy effects is lagging. Lane emphasized that the ECB is not bound to a specific rate trajectory and will maintain a data-dependent approach moving forward, as per Bloomberg’s report.