Driving the yen's strengthening early in the Asian session this morning was the latest report on monetary policy changes in Japan.
The Bank of Japan (BOJ) is reportedly reviewing the impact of their previous policy easing in addition to considering yield curve uncertainty.
Even before this, there was a view in the market that the loose monetary policy applied by Japan for a long period will change after the end of Governor Haruhiko Kuroda's term in April 2023.
The yen returned to show some strengthening today after a dismal move since the beginning of the week following the positive impact of China's economic opening which removed the appeal of the safe-haven currency.
It can be observed that the price movement on the chart of the EUR/JPY currency pair has started to experience a change in price direction since the Asian session this morning.
Previously, the price had shown a rising pattern from the beginning of the week until it reached a high level of around 142,800 yesterday, but started to show a decline again due to the strengthening of the Yen which pushed the price down.
Starting trading in the Asian session around 142.400, the price has dropped to around 141.600 by the start of the European session.
The decline has also seen the price break below the Moving Average 50 (MA50) barrier level on the 1-hour time frame on the EUR/JPY chart, giving a bearish signal for the price.
The decline if continued until the next session is expected to lead to the support zone at 140.00.
Continuing the decline lower is seen to be heading towards the concentration zone hit last week around 137,500.
The situation is different if the price continues to rise higher again surpassing the level reached yesterday at the height of 142,800.
The increase that continues beyond the resistance zone will target the latest high around 145.00.
