EUR/JPY gains further to near 183.00 as BoJ raises interest rates to 0.75%

• EUR/JPY jumps to near 183.00 as the BoJ hikes interest rates by 25 bps to 0.75%, the highest in three decades.
• Investors await BoJ Ueda’s press conference for fresh cues on the monetary policy outlook.
• The ECB left interest rates steady on Thursday, and signaled uncertainty on the inflation outlook.

The EUR/JPY pair extends its upside to near 183.00 on Friday as the Japanese Yen (JPY) weakens, after the monetary policy announcement by the Bank of Japan (BoJ). The pair rises further as the BoJ has raised its interest rates by 25 basis points (bps) to 0.75%.

The BoJ was expected to do so as BoJ Governor Kazuo Ueda said earlier this month that underlying inflation is sustainably close to the central bank’s target of 2%.

Going forward, investors will pay close attention on comments from BoJ Governor Ueda in his press conference, which is scheduled at 06:30 GMT. Market participants would look for cues about whether the BoJ will continue raising interest rates next year, and if so how far they can go.

Meanwhile, the Euro (EUR) outperforms its major peers, following the monetary policy announcement by the European Central Bank (ECB). On Thursday, the ECB decided to leave its Deposit Facility Rate steady at 2%, as expected, and refrained from delivering any remarks on the interest rate outlook amid uncertainty surrounding the inflation outlook.

There was “no discussion on cut or hike today", and, “we simply cannot offer forward guidance given uncertainty," ECB President Christine Lagarde said in the press conference. Lagarde added, “Outlook for inflation continues to be more uncertain than usual.”

For more cues on the Eurozone interest rate outlook, investors will focus on speeches from a slew of ECB policymakers during the European and North American session.