• EUR/JPY moves higher and falters near 121.40, the 21-day SMA.
• BoJ kept rates, forward guidance on hold earlier today.
• German advanced CPI next of relevance in Euroland.

EUR/JPY managed to climb to fresh tops beyond 121.00 the figure earlier in the session, although subsequent JPY strength triggered a correction lower to the current 121.00 neighbourhood.

EUR/JPY weaker post-BoJ, looks to German data

The cross remains sidelined just below the key 21-day SMA, today around 121.40 amidst increasing cautiousness surrounding the European currency in light of the potential easing measures likely to be unveiled at the September ECB meeting.

In addition declining US yields have been lending upside pressure to the Japanese safe haven JPY, undermining the initial optimism and forcing the cross to give away initial gains to the current 121.00 rgion.

Still around Japan, the BoJ left unchanged its repo rate and the QQE programme at today’s meeting, broadly in line with market expectations. At his press conference Governor H.Kuroda said the central bank sees extending the ongoing ultra dovish stance for an extended period of time.

In the data space, German Business Climate tracked by GfK dropped further to 9.7 for the month of August, while preliminary inflation figures are due later in the European midday. Additional data saw Consumer Confidence in the euro area improving a tad to -6.6 in July, while the Industrial Sentiment deteriorated further to -7.4 this month.

EUR/JPY relevant levels

At the moment the cross is receding 0.17% at 121.02 and a breakdown of 120.05 (low Jul.25) would open the door to 118.82 (2019 low Jan.3) and then 118.23 (monthly low Feb.24 2017). On the upside, the initial hurdle aligns at 121.37 (high Jul.25) followed by 121.89 (55-day SMA) and finally 122.32 (high Jul.10).