EUR/JPY recovers few pips from daily low, keeps the red around mid-163.00s

• EUR/JPY struggles to capitalize on Monday’s recovery from a nearly one-month low.
• Intervention fears and geopolitical risks revive demand for the JPY and exert pressure.
• The BoJ rate-hike uncertainty cap gains for the JPY and helps limit losses for the cross.

The EUR/JPY cross meets with a fresh supply during the Asian session on Tuesday and reverses a part of the previous day’s recovery move from the 50-day Simple Moving Average (SMA), around the 162.25 region, or a nearly one-month low. The intraday slide is sponsored by the emergence of fresh buying around the Japanese Yen (JPY) and drags spot prices back closer to the 163.00 mark in the last hour, though lacks follow-through.

Geopolitical tensions escalated after the Biden administration approved Ukraine’s use of long-range US weapons deeper inside Russia, which has deployed North Korean troops to reinforce its war. This, along with speculations that Japanese authorities will intervene in the FX market to prop up the domestic currency, turn out to be key factors undermining the safe-haven JPY and exerting some downward pressure on the EUR/JPY cross.