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• EUR/JPY posts modest gains around 164.10 in Tuesday’s early European session. 
• Some verbal intervention from Japanese authorities lifts the Japanese Yen. 
• ECB’s Panetta said the inflation trend was making a rate cut possible. 

The EUR/JPY cross trades with a mild bullish bias above the 164.00 mark during the early European session on Tuesday. The intervention warning from the Japanese authorities on Monday provides some support to the Japanese Yen (JPY) and might cap the cross’s upside in the near term. Traders will closely monitor the Tokyo Consumer Price Index (CPI) for March, due on Friday. At press time, the cross is trading at 164.10, gaining 0.01% for the day. 

The Japanese Yen has dropped despite the Bank of Japan's (BoJ) raising interest rates last week, marking the first hike since 2007. However, Japan's Vice Minister of Finance for International Affairs, Masato Kanda made some verbal intervention on Monday, saying that he will take appropriate steps to respond to the excessive weakness of the Japanese Yen without excluding any measures. This, in turn, lifts the JPY and acts as a headwind for the EUR/JPY cross. 

On the other hand, traders increased their bets on rate cut expectations from the European Central Bank (ECB) after the Swiss National Bank (SNB) became the first major central bank to lower borrowing costs last week. The ECB policymaker Fabio Panetta stated on Monday that the central bank is moving towards an interest rate cut as inflation is falling rapidly and approaching the bank's 2% target. Meanwhile, ECB chief economist Philip Lane said that the ECB is more confident that wage growth is slowing back toward more normal levels, potentially opening the door to rate cuts. 

The German Gfk Consumer Confidence Survey for April is due on Tuesday, along with the ECB's Lane speech. Traders will watch the German February Retail Sales on Thursday. On Friday, the Japanese Tokyo CPI inflation data for March will be in the spotlight. 

EUR/JPY

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