On Monday, the euro reached an 8-year high against the Japanese yen.
The Euro hit its highest level against the Japanese Yen on Monday since December 2014. It seems that the differing views on monetary policy between the European Central Bank and the Bank of Japan weigh on the sentiment of traders.
While New Bank of Japan President Kazuo Ueda continues to reinforce the view that the BoJ is committed to maintaining the longstanding loose central bank policy. Until then, senior eurozone policymakers are urging more interest rate hikes in order to curb inflation in the region.
Isabelle Schnabel, a member of the European Central Bank’s Governing Council, told Politico, published on the bank’s website Monday. stated in an interview, that a 50 basis point rate hike in May “cannot be ruled out.” Schnabel added that it would be too early “to declare victory in the battle against inflation.” The ECB decision-maker also said that according to the central bank’s latest forecasts, the eurozone is not expected to be affected by a recession. “Currently, there are no specific indications of weak economic operations,” he explained.
In the next two weeks, both central banks, the Bank of Japan and the European Central Bank, are expected to hold their May interest rate decision meeting.
The EUR/JPY exchange rate reached a level of 148.44 yen after increasing by more than 0.7 percent around 5:45 in the afternoon. The latest example of this was in December 2014. In the same period, the US dollar strengthened by about 0.4 percent against the Japanese yen.
source: Teletrader
Cover image source: Shutterstock
