EUR/JPY steadies above 187.00 following German ZEW Survey data

• EUR/JPY moves little following the release of German ZEW Survey figures.
• Germany’s ZEW Economic Sentiment plunged to -17.2 in April, far below forecasts and down from March’s -0.5.
• Nikkei reported that the BoJ is expected to leave interest rates unchanged in April.

EUR/JPY remains steady after modest gains registered in the previous day, trading around 187.20 during the Asian hours on Monday. The currency cross holds ground as the Euro (EUR) moves little following the release of German ZEW Survey data.

German ZEW Survey - Economic Sentiment plunged to -17.2 in April, far below the -5 forecast and down from -0.5 in March. The Current Situation index also deteriorated sharply to -73.7, missing estimates of -70.0 and declining from -62.9 previously. Meanwhile, the Eurozone ZEW Economic Sentiment index also weakened markedly, falling to -20.4 versus expectations of -3.6.

European Central Bank (ECB) Vice President Luis de Guindos said during the European trading session on Tuesday that the central bank views private credit as a key source of risk to financial stability, alongside elevated market valuations and loose fiscal policy in some countries, according to Reuters.

The EUR/JPY cross may continue to appreciate as the Japanese Yen (JPY) could remain under pressure amid increasing uncertainty over the Bank of Japan (BoJ) policy outlook. The BoJ is expected to revise inflation forecasts higher while lowering growth projections, reflecting rising energy costs and broader headwinds stemming from the Iran conflict.

According to a report from Nikkei, the BoJ is expected to leave interest rates unchanged at 0.75% in the monetary policy announcement on April 28. Other reports also suggest that the central bank is assessing the economic impact of the Middle East conflict, although it may signal a resumption of policy normalization as early as June.