EUR/JPY rebounds from 6-month lows, having the best performance in a month

• Euro reverses sharply and turns positive despite dovish ECB. 
• Yen weakens across the board as US yields bounce sharply higher. 

The EUR/JPY pair bottomed during Draghi’s press conference at 120.04, the lowest intraday level since January 2nd. Then it turned sharply higher rising 130 pips from the lows. It peaked at 121.37, the highest level in a week. 

At the moment is hovering around 121.00, up 65 pips for the day, having the best performance in a month. The critical driver was a reversal in the euro across the board. 

The common currency bottomed during Draghi’s press conference on the back of the dovish meeting. The central bank said it will study the introduction of a new purchase program, and the use of a tiered deposit rate system. ECB continues to seen risks to the outlook tilted to the downside. He added that the Council did not discuss the size of rate cuts today, and argued they want to see new projections before taking action.

The euro was affected by the tone of the central bank and also by lower EZ yields. But it reversed sharply, led by an 80-pip rebound in EUR/USD from 2-year lows. The change in the Euro helped EUR/JPY. 

The pair also received a boost from a rally in USD/JPY. It rose from 108.10 to levels on top of 108.50, amid a rebound in US yields. The 10-year climbed from 2.019% to 2.096%. The decline of the yen kept EUR/JPY supported.