EUR/JPY has been trading in negative territory for three consecutive days in the early European session on Monday, with a 0.28% decrease. This decline is attributed to the uncertainty surrounding the political situation in France. President Macron of France recently announced a snap election after his party suffered a significant defeat to the far-right in the EU vote.
In Japan, the Gross Domestic Product (GDP) shrank by 0.5% quarter-on-quarter in the first quarter of the year, aligning with market expectations. This mixed economic data from Japan has also contributed to the downward pressure on the EUR/JPY cross.
Additionally, the European Central Bank (ECB) recently cut interest rates by 25 basis points at its June meeting. The ECB governing council emphasized a data-dependent approach in determining the appropriate level and duration of restrictions.
Looking ahead, Japan’s 10-year government bond yield has increased to 1.029% ahead of the Bank of Japan’s monetary policy meeting. The BoJ is anticipated to maintain its interest rate, but there may be discussions about reducing their significant debt holdings.
Overall, the EUR/JPY cross is facing challenges from political uncertainties in France and mixed economic data from Japan, along with developments in central bank policies.