The central banks provide most of the sources a trader in South Africa will need for this pair. The ECB meets once every six weeks, and the BOJ meets once a month. Visit the official websites of the two central banks and look for the indicators to make out which way the economies are going.
The European indicators to follow include:
- Inflation or the CPI (Consumer Price Index)
- PMI or Purchasing Managers Index (PMI)
- Interest rate decisions
- Press conferences
The CPI must be tracked for both regions because the central banks try to keep inflation close to 2 percent. In case, anything moves higher or lower, the banks are going to take action.
The PMI is important as it tells you how strong the services and manufacturing sectors are in the European economy. The numbers will point towards the steps the ECB could be taking at the next meeting and suggest which way the Euro could move.
The press conferences of the ECB involve questions and answers, based on which the markets can fluctuate. Based on these indicators, a trader in South Africa can make an educated guess about which way the EUR-JPY will go. For example, if the inflation moves far above 2 percent in the European region, the ECB is likely to cut interest rates and this will negatively affect the Euro, which will cause the EUR-JPY rate to fall.