EUR/JPY must hold on to 154 to avoid sliding towards the late July low of 151.50 – SocGen

EUR/JPY has lost almost 6% since late November. Economists at Société Générale analyze the pair's outlook ahead of the Bank of Japan (BoJ) meeting.

BoJ forecast to stand pat

We don’t believe the BoJ will surprise. YCC settings and the policy rate are forecast to remain unchanged. The bank’s comments on the virtuous cycle from prices to wages will be key to understanding whether it is confident on inflation moving closer to the 2% target in a sustainable and stable manner. Tweaks to the YCC or an exit from NIRP are unlikely before April in our view. 

EUR/JPY must hold on to 154 to avoid sliding towards the late July low of 151.50. The 200-DMA offers support at 154.34.