• EUR/JPY holds the recovery move from an almost six-week low of 155.15.
• The BoJ is expected to leave interest rates unchanged at 0.25% on Friday but will deliver hawkish guidance.
• ECB officials refrain from committing a pre-defined interest rate cut path.

The EUR/JPY pair holds a slight recovery move above 156.00 in Tuesday’s European session from a fresh, almost six-week low of 155.15 recorded on Monday. The cross holds recovery for now but its outlook remains uncertain amid growing speculation that the Bank of Japan (BoJ) will raise interest rates further this year.

The BoJ has already raised interest rates to 0.25% in its last three meetings. Analysts at Standard Chartered see the BoJ interest rates rising to 0.5% by the year-end. The confidence of market experts has increased due to inflation remaining above 2% for the past 21 months.

In the monetary policy meeting on Friday, the BoJ is expected to leave key borrowing rates unchanged at their current levels.

Meanwhile, the Euro (EUR) gains as market speculation for the European Central Bank (ECB) delivering a consecutive interest rate cut in the October meeting has waned. The comments from ECB Governing Council member Peter Kazimir on Monday indicated that the central bank will wait for more good data to meet their projections before easing the monetary policy further.

“The ECB needed to be sure that incoming data confirmed its projections, otherwise policymakers might regret rushing to cut borrowing costs before inflation has been sustainably defeated,” Kazimir said, Reuters reported.