Strong Euro nears nine-year high versus Japanese yen

At the start of a week that includes a widely awaited Bank of Japan meeting and the final few data releases before the Federal Reserve and European Central Bank make rate decisions in early May, the euro edged up a bit and the Japanese yen weakened.

The euro was trading at $1.1015, up 0.25% against the dollar, its first time back above $1.10 since hitting a 14-month high of $1.10755 earlier this month.

As Europe’s largest economy hopes to have avoided a winter recession, a survey released on Monday revealed that business morale in Germany increased marginally in April. Pierre Wunsch, the head of the Belgian central bank and an ECB policy maker, also made hawkish comments.

The Japanese yen was under pressure after comments made by the new governor of the Bank of Japan, Kazuo Ueda, regarding the necessity of continuing monetary easing. As a result, the euro’s gains were most notable versus the yen, up 0.63% to 148.3 yen.

The euro hasn’t been this high since late 2014 if it surpasses the 148.385 yen mark from October.

The dollar’s value vs the yen increased by 0.36% to 134.60.

The currency markets were calmer aside from the thrill of the euro/yen cross as traders awaited important central bank meetings, the first of which is the Bank of Japan meeting on Friday, which Ueda will preside over.

Both the Fed and the ECB will meet next week, but before that markets will digest U.S. first quarter GDP and personal consumption expenditures (PCE) data, looking for signs of economic strain and evidence of sticky inflation for clues on the Fed’s policy path.

Policymakers are widely expected to raise rates by another 25 basis points at next week’s Federal Open Market Committee (FOMC) meeting, though the focus will be on guidance for future moves.

Markets are expecting the ECB to raise rates by a quarter point, with the possibility of a 50 basis points hike. Euro zone inflation and growth data are also due this week.