• EUR/JPY loses ground as the BoJ indicates further rate hikes if the economic outlook meets expectations.
• Fitch Ratings report suggests that the BoJ may raise rates to 0.5% by the end of 2024.
• ECB policymaker Joachim Nagel mentioned that core inflation is moving in the right direction.

EUR/JPY edges lower to near 156.20 during Friday’s Asian session, continuing to receive support from the Bank of Japan's (BoJ) hawkish signals. The BoJ has indicated that it may raise interest rates further if the economic outlook meets expectations.

Fitch Ratings' latest report on the Bank of Japan's policy outlook suggests that the BoJ might raise rates to 0.5% by the end of 2024, 0.75% in 2025, and 1.0% by the end of 2026. The BoJ is diverging from the global trend of policy easing, having raised rates more aggressively than anticipated in July. This move underscores its increasing confidence that reflation is now firmly established.