investingLive European FX news wrap: JPY leads on better data, higher rate hike odds

Today’s European session has seen limited movement, but the Japanese Yen stands out as a key mover. The Yen appreciated due to better than expected Tankan data and positive comments from the Bank of Japan (BoJ), which pushed the rate hike odds to 83%. The market is now certain that the BoJ will implement a 25 basis point rate hike at this week's monetary policy decision, but it does not expect the BoJ to take a more hawkish stance than the market is currently pricing in. The Yen is likely to be influenced more by US data moving forward, with the NFP report being particularly significant. Meanwhile, the US dollar remains weak as Fed Chair Powell's dovish tone continues to dictate the market. Additionally, the highlight for the US session will be the Canadian CPI report, important for determining future monetary policy direction. Market participants remain cautious yet poised for potential surprises from both the BoJ and upcoming US data.