EUR/JPY reaches 182.00 ahead of Eurozone Industrial Production data

• EUR/JPY has reached 182.00 after bouncing from lows near 181.00 earlier on the day.
• Weak Japanese GDP data has curbed the Yen's upside momentum.
• Eurozone Industrial Production is expected to show a significant setback in December.

The Euro (EUR) is taking advantage of a somewhat softer Japanese Yen (JPY) on Monday, following downbeat Gross Domestic Product (GDP) figures, to trim some of the previous days’ losses and reach session highs above 182.00. In Europe, all eyes are on the Industrial Production release, due later on Monday.

Eurozone’s Factory Output is expected to have contracted at a 1.5% pace in December, reversing November’s 0.7% growth, as well as the moderate advances witnessed in previous months, and casting a shadow over the rhetoric of the Eurozone’s economic resilience. Year-on-year, Eurozone Industrial Production is expected to have slowed to a 1.2% growth, less than half the 2.5% yearly advance seen in November.

The Yen opened the week on its back foot, weighed down by the disappointing economic growth levels seen on Sunday. Japan’s Q4 preliminary GDP showed a meagre 0.1% quarterly growth against market expectations of a 0.4% advance, while the annualised rate grew 0.2%, well below the 1.6% consensus. In the previous quarter, the Japanese economy contracted 0.7% and 2.6% year-on-year.

These figures have put the theory of the Bank of Japan’s (BoJ) March rate hike into question, a feeling that was exacerbated by the meeting between Prime Minister Takaichi and BoJ Governor Ueda earlier on Monday. The BoJ chief, however, said that the meeting addressed general economic and financial developments and denied any request regarding interest rates.