• EUR/JPY remains sidelined after a sluggish start to the week.
• Hawkish ECB talks, fears that BoJ’s Kuroda could play one last shot before retiring seem to favor bulls.
• Sluggish yields amid US holidays challenged momentum traders ahead of today’s full markets.
• Preliminary readings of February’s activity data eyed for clear directions.

EUR/JPY seesaws around mid-143.00s amid Tuesday’s sluggish Asian session, following an inactive start to the week’s trading.

The cross-currency pair struggles justify the hawkish comments from the European Central Bank (ECB) officials and the upbeat Eurozone data ahead of the key Purchasing Managers Index (PMI) figures for February. Other than the cautious mood before February’s PMIs for Japan, Germany and the Eurozone, flat US Treasury bond yields also challenge the pair’s immediate moves.

ECB governing council member and Finnish central bank Chief Olli Rehn recently said, per Reuters, “ECB should keep raising interest rates beyond March and the rate peak, which should be stuck to for some time, could be reached over the summer.” "With inflation so high, further rate hikes beyond March seem likely, logical and appropriate," Rehn told Germany’s Börsen-Zeitung newspaper.

Also teasing the EUR/JPY bulls could be the upbeat prints of Eurozone Consumer Confidence. That said, the first readings of the bloc’s Consumer Confidence for February matched market forecasts of -19 versus -20.9 prior.

Furthermore, fading hawkish bias about the Bank of Japan’s (BoJ) next moves, amid fears that Governor Haruhiko Kuroda will play his one last shot of ultra-loose monetary policy before retiring in April, also seemed to have favored the EUR/JPY buyers.

On the flip side, challenges to the sentiment, especially emanating from geopolitical fears surrounding China, Russia and North Korea, weigh on the prices. Furthermore, fears of the BoJ’s money market intervention and upbeat Japan data also tease the EUR/JPY sellers.

To portray the mood, S&P 500 Futures print mild losses near 4,075 amid sluggish US 10-year Treasury bond yields.

That said, EUR/JPY traders should keep their eyes on the geopolitical headlines ahead of the key activity data for Japan and the bloc. It should be noted that the firmer prints of the EU PMIs could offer more strength to the EUR buyers than the JPY, in case of upbeat Japanese data, amid dovish bias for the BoJ and the hawkish concerns for the ECB.

Technical analysis

Monday’s Doji candlestick teases EUR/JPY bears but the previous resistance line from late December 2022, around 142.80 by the press time, puts a floor under the prices.