The EUR/JPY pair trades in a tight range around 162.50 in Thursday’s European session. The cross consolidates as investors have sidelined ahead of the European Central Bank’s (ECB) interest rate decision, which will be announced at 12:15 GMT.

The ECB is widely anticipated to reduce the Rate on Deposit Facility by 25 basis points (bps) to 3.25%. This would be the second consecutive interest rate cut by the ECB in a row.

A shift in focus of ECB officials to economic stagnation in the Eurozone from taming price pressures is the major reason behind firm ECB rate cut bets. The Eurozone economy is going through a rough phase due to weakening demand from domestic and overseas markets. Meanwhile, growing speculation for former US President Donald Trump winning presidential elections, which will take place on November 5 has also dampened the Eurozone’s outlook.

Trump is expected to elevate import tariffs, which could hurt exports from the old continent and make their economic prospects more vulnerable.

Meanwhile, the annual Eurozone Harmonized Index of Consumer Prices (HICP) has decelerated to 1.7% in September, according to the revised estimate.

In the Japanese region, investors await the National Consumer Price Index (CPI) data for September, which will be published on Friday. The inflation data will influence market speculation for the Bank of Japan’s (BoJ) interest rate outlook. Economists expect the National CPI ex Fresh Food to have grown by 2.3%, slower than 2.8% in August.

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