EUR/JPY pares intraday losses below 155.00 as yields pause further downside, Japan intervention fears recede

• EUR/JPY picks up bids from intraday low, consolidates losses on D1.
• Treasury bond yields pause further downside as markets await more clues to defy hawkish central bank concerns.
• Downbeat Japan data, hawkish ECB talks also underpin recovery moves.
• Risk catalysts, mid-tier EU data/events eyed for clear directions.

EUR/JPY recovers from the intraday low but stays mildly offered near 154.80 heading into Friday’s European session. In doing so, the cross-currency pair traces the latest corrective bounce in the Treasury bond yields, as well as justifies the downbeat Japan data, amid sluggish trading hours.

That said, the US 10-year and two-year Treasury bond yields print mild gains around 3.78% and 4.65% by the press time, after refreshing a two-week low the previous day. It should be noted that Japan Government Bond (JGB) yields for 10-year retreat from 11-week high while those from Europe and Germany await the opening bell.

Elsewhere, Japan’s Industrial Production for May dropped to -2.2% MoM and 4.2% YoY versus -1.6% and 4.7% respectively priors. Additionally, Capacity Utilization slumps to -6.3% compared to -2.5% market forecasts and 3.0% previous readings.

On the flip side, Eurozone Industrial Production eased to 0.2% MoM for May on a seasonally adjusted basis versus 0.3% market forecasts and 1.0% previous readings. It should be noted, however, that the European Central Bank’s (ECB) June policy meeting revealed on Thursday that minimum of two successive rate hikes needed for inflation projections to materialize. Alternatively, ECB Governing Council member Ignazio Visco said during an interview with Italy’s Sky TG24 news channel, “We are not very far’ from peak in interest rates.”

Amid these plays, markets in the Asia-Pacific region remain firmer but the S&P500 Futures print mild losses while making rounds to yearly top.

It’s worth noting that the recent easing chatters about Japan’s intervention to defend the Yen also allow the EUR/JPY pair to portray the corrective bounce.

Looking ahead, European Commission (EC) Economic Forecasts and trade numbers may direct the traders.

Technical analysis

Unless crossing a downward-sloping resistance line from July 04, close to 155.40 by the press time, the EUR/JPY pair remains on the bear’s radar.