EUR/JPY rises to all-time-high of 171.60 and then retreats

EUR/JPY reached a new all-time high of 171.60 before dropping by over 1.0%, possibly due to Japanese authorities intervening to strengthen the Japanese Yen. The Eurozone saw stable inflation data in Germany and Spain, indicating the possibility of continued support for the Euro. German HICP rose by 2.4% in April year-over-year, slightly above expectations, while Spain’s HICP increased by 3.4% YoY in April. Higher interest rates in the Eurozone may be necessary to combat inflation, potentially attracting more foreign capital inflows to support the Euro.