EUR/JPY: EURO edged up on broader weakness in Yen and concern about ECB Vice President Post

• The Japanese Yen is under pressure on Japan’s concern about the strength of its currency.
• EUR is also under pressure on concerns about ECB Vice President candidate.

EUR/JPY is now around 132.00 in the European session, edging up 0.1% in a day of range-bound trading as the US is on holiday on Monday. Japanese Yen lost some strength on Friday after Japanese government said that it is watching Yen move with “greater” sense of concern and is ready to act (intervene) when actually needed.

The Japanese Yen is also under some pressure on the reappointment of Kuroda as the BOJ chief as he may continue his “powerful” easing until 2% inflation target is reached on a sustainable basis. BOJ may refrain from raising 10Y JGB yield as a part of its YCC (yield curve control) policy change in the near term, considering the recent rapid appreciation of Yen.

The USD/JPY was little moved by the mix of the economic data in Japan on Monday with trade balance flashing deficit of JOY -943B and exports rising 12.2% y/y in January while imports grew by 7.9% y/y.  a

For the Euro, there was no important economic data today, but current account for December reaches slightly less than expected surplus of EUR 29.9B a.

Additionally, the Euro came under pressure after reports that Ireland has withdrawn its candidacy for ECB vice president post and will support the Finance Minister (FM) of Spain as a “consensus” candidate. 

There is the strong buzz on the street that appointment of someone from Southern Europe like Spain could be strategic as someone from Germany is poised to take Draghi’s role next year.

Apart from politics regarding ECB’s VP post, EUR is also under pressure on news that Latvian central bank Governor Rimsevics, a member of the ECB’s governing council, was detained by the anti-graft bureau in a flurry of actions by officials.

Technically, EURJPY has now good support around 131.40 zones and for any bounce back, it needs to sustain above 132.50-133.00 price area.