• EUR/JPY picks up bids to refresh intraday high near two-week top.
• US Treasury yields await more clues after regaining upside momentum the previous day.
• Russian pipeline halt, hopes of no change in BOJ policy despite acceleration in price rise challenge buyers.
• Japan PPI improved on YoY, inflation data from China, Germany and the US will be important for near-term directions.

EUR/JPY bulls flirt with the 138.00 threshold while keeping the previous day’s gains intact around a fortnight high as Tokyo opens on Wednesday. In doing so, the cross-currency pair pays little heed to Japan’s Producer Price Index (PPI) data amid sluggish Treasury yields. The reason for the pair’s latest inaction could also be linked to the cautious mood ahead of the key inflation data for July from the important global economies.

Japan’s PPI for July matched 0.4% MoM forecasts but rose to 8.6% YoY versus 8.4% market consensus. That said, the US 10-year Treasury yields remain sidelined at around 2.79% after pausing the week-start pullback the previous day.

On Tuesday, MNI cited people familiar with the Japanese central bank’s thinking to mention that the Bank of Japan (BOJ) expects prices to rise more quickly than officials had anticipated at their July meeting. “The jump in inflation to 3% or higher later this year, however, will not be enough to prompt any shift in its easy policy stance unless it feeds into an acceleration of wages next spring,” added MNI.

Elsewhere, the political uncertainty, suggesting Japanese Prime Minister Fumio Kishida’s readiness for shuffling the cabinet, appears to weigh on the JPY. Even so, Finance Minister Shunichi Suzuki is likely to retain his position, per Reuters, which in turn flashes no major challenges for the Bank of Japan’s (BOJ) easy money policies. The same should keep the JPY bears hopeful.

It should be noted that fears of more hardships for the Eurozone due to Russia’s halting oil supplies also should have weighed on the EUR/JPY prices. “Russia reportedly suspended oil flows via the southern leg of the Druzhba pipeline, amid transit payment issues,” said Reuters.

On the contrary, expectations of more easing from the BOJ and sluggish yields, as well as preparations for today’s key CPI data from China, Germany and the US for July, appeared to have propelled the EUR/JPY prices of late.

Technical analysis

Unless providing a daily closing beyond the 100-DMA, around 140.70 by the press time, EUR/JPY stays on the seller’s radar.