• EUR/JPY has climbed above 142.30 despite an improvement in Japan’s GDP numbers.
• The shared currency bulls are awaiting the monetary policy announcement by the ECB.
• An unchanged interest rate policy is expected by the ECB despite advancing inflation.

The EUR/JPY pair has recorded a fresh seven-year high at 142.32 despite the Japanese Cabinet Office having reported better-than-expected Gross Domestic Product (GDP) numbers in the Tokyo session. A significant improvement has been witnessed in the annualized GDP numbers as the figure has improved to -0.5% against the expectations and the former print of -1%.  Also, the quarterly GDP is climbed to -0.1% vs. the forecasts of -0.3% and the prior figure of -0.2%.

A potential rise in Japan’s GDP numbers has failed to infuse strength in Japanese yen and the cross has recorded a fresh seven-year high.

Meanwhile, the shared currency bulls are awaiting the announcement of the interest rate decision by the European Central Bank (ECB), which is due on Thursday. As per the market consensus, the ECB is expected to keep interest rates unchanged at 0%. However, hawkish guidance by the ECB President Christine Lagarde could not be ruled out. Mounting inflationary pressures in the eurozone are hurting the paychecks of households in Europe. Therefore, the ECB could elevate its interest rates later this year.

The eurozone inflation has climbed above 8% in May and more upside is expected as the European Union has announced an embargo on oil imports from Russia. Considering its higher dependency on Russian fossil fuels, shifting onto any other supplier would demand ample time, which could elevate oil prices further in the meantime.

But before that, Eurostat will report the GDP numbers on Wednesday. A preliminary estimate for the annual GDP is 5.1% while the quarterly GDP is seen at 0.3%.