• EUR/JPY pulls back from a nearly 15-year top touched on Thursday.
• Repositioning trade ahead of the BoJ prompts some profit-taking.
• The ECB’s hawkish rate hike should lend support and limit losses.

The EUR/JPY cross comes under some selling pressure during the Asian session on Friday and erodes a part of the previous day's strong move up to its highest level since September 2008. Spot prices currently trade just above the 153.00 mark, down nearly 0.30% for the day, though any meaningful corrective decline still seems elusive.

The intraday downtick, meanwhile, could be attributed to some repositioning trade ahead of the Bank of Japan (BoJ) monetary policy decision, scheduled to be announced at 03:00 GMT this Friday. The Japanese central bank is widely anticipated to stick to the ultra-loose policy settings, including the yield curve control policy. The expectations were reaffirmed by recent remarks by several BoJ officials, including Governor Kazuo Ueda, which might continue to undermine the Japanese Yen (JPY) and lend support to the EUR/JPY cross.

Adding to this, reduced bets for an intervention by the Japanese government, to stabilize the domestic currency, along with a generally positive tone around the equity markets, could further weigh on the JPY. The shared currency, on the other hand, might continue to draw support from the European Central Bank's (ECB) lift-off for the eighth straight time in June and hawkish outlook, signalling further tightening to bring Eurozone inflation to the 2% target. This might further contribute to limiting the downside for the EUR/JPY cross.

Even from a technical perspective, this week's sustained breakout through the 151.00 horizontal barrier was seen as a fresh trigger for bullish traders and supports prospects for additional gains. That said, the Relative Strength Index (RSI) on the daily chart is flashing overbought conditions and warrants some caution. Nevertheless, the EUR/JPY cross seems poised to register strong weekly gains and prolong its recent upward trajectory witnessed over the past three months or so.

Technical levels to watch