• EUR/JPY attracts buyers for the fourth straight day and is supported by a combination of factors.
• The BoJ rate hike uncertainty and a positive risk tone are seen undermining the safe-haven JPY.
• Bets that the ECB is done cutting rates benefit the EUR and also act as a tailwind for the cross.

The EUR/JPY cross scales higher for the fourth straight day – also marking the fifth day of a positive move in the previous six – and climbs to a fresh high since August 1992 during the Asian session on Wednesday. Spot prices currently trade just below the 179.00 mark, up around 0.25% for the day, and seem poised to appreciate further.

The Japanese Yen (JPY) continues with its relative underperformance amid the uncertainty over the Bank of Japan's (BoJ) policy tightening path, which, in turn, is seen as a key factor that continues to act as a tailwind for the EUR/JPY cross. In fact, the BoJ has been reluctant to commit to further interest rate hikes on the back of Japan's Prime Minister Sanae Takaichi's pro-stimulus stance.

The Japanese government is expected to finalise an economic stimulus package on November 21. Moreover, according to a draft outline, the package will urge the BoJ to focus on achieving strong economic growth and stable prices, underscoring Takaichi’s preference for keeping rates low to support a fragile recovery. This, along with receding safe-haven demand, undermines the JPY.

The shared currency, on the other hand, seems to draw support from bets that the European Central Bank (ECB) has finished cutting interest rates. In fact, ECB Governing Council (GC) member and Austrian National Bank Governor Martin Kocher said on Tuesday that the current monetary policy status is appropriate, and expectations show that not much will happen in the next few months.

The aforementioned fundamental backdrop validates the near-term positive outlook and suggests that the path of least resistance for the EUR/JPY cross is to the upside. Even from a technical perspective, the overnight close above the 178.25-178.30 horizontal barrier backs the case for a further appreciating move, beyond the 179.00 mark, towards reclaiming the 180.00 psychological mark.