• EUR/JPY has slipped to near 142.20 as focus shifts to the eurozone HICP.
• The eurozone HICP is seen at 8.3% vs. 8.1% reported earlier.
• BOJ’s ultra-loose monetary policy will keep the yen bulls on the tenterhooks.

The EUR/JPY pair is declining sharply lower after failing to overstep the critical hurdle of 143.00.  The cross has displayed the signs of a bearish open rejection-reverse trading session. The asset moved marginally higher after opening flat, found barricades around the crucial hurdle of 143.00, slipped lower and extended losses after slipping from the opening price at 142.62.

The yen bulls are performing well despite the continuation of the ultra-loose monetary policy from the Bank of Japan (BOJ). BOJ’s monetary policy minutes dictated that most of the policymakers were favoring a prudent monetary policy.  

Despite the achievement of the targeted inflation rate above 2%, the BOJ is inclined to flush more liquidity into the economy. The aggregate demand levels in the Japanese economy have not reached their pre-pandemic levels yet. Also, the inflation rate in the Japanese economy is contaminated by soaring oil prices and costly food items.

Meanwhile, the shared currency bulls are expecting a rate hike announcement in July.  It is worth noting that the economy has not elevated its interest rates yet despite soaring price pressures. The other Western leaders have already paddled their interest rates to fix the inflation mess and now the European Central Bank (ECB) should be bold enough to dictate a rate hike.

This week, investors' focus will remain on the eurozone Harmonized Index of Consumer Prices (HICP) data. A preliminary estimate for the annual Inflation rate is 8.3% against the prior print of 8.1%.  A continuation of the higher inflation rate is advocating a mega rate hike announcement by the ECB.