• EUR/JPY gains ground ahead of interest rate decision from European Central Bank.
• BoJ Governor Kazuo Ueda committed to achieving the 2.0% inflation target.
• ECB is expected to maintain the Main Refinancing Operations Rate at 4.50%, and the Deposit Facility Rate at 4.0%.

EUR/JPY snaps its losing streak ahead of the interest rate decision from the European Central Bank (ECB). The EUR/JPY pair advances to around 160.80 during the European trading session on Thursday.

Traders will turn their attention to the upcoming Tokyo Consumer Price Index data scheduled for Friday, aiming to gather more insights into Japan's economic outlook. They could be particularly interested in cues regarding the potential shift of the Bank of Japan's (BoJ) short-term interest rates out of negative territory as the necessary conditions align.

BoJ Governor Kazuo Ueda, however, emphasized a strong commitment to achieving the 2.0% inflation target. Ueda's statements suggested a potential gradual reduction of extensive stimulus measures in the future.

The Ministry of Finance released Japan's Merchandise Trade Balance Total for December on Wednesday, surpassing expectations. Concurrently, Japanese Exports (YoY) showed a notable increase. These better-than-expected readings likely contributed to bolstering the Japanese Yen (JPY) and might have created a headwind for the EUR/JPY pair.

On the other hand, the mixed Purchasing Managers Index (PMI) data from the Eurozone and Germany might have provided some support for the Euro, which in turn, might have limited the losses of the EUR/JPY pair.

European Central Bank is expected to maintain the Main Refinancing Operations Rate at 4.50%, and the Deposit Facility Rate at 4.0%. ECB President Christine Lagarde commented that the central bank could potentially begin reducing interest rates starting from late summer. Lagarde expressed concerns about inflation being higher than the ECB's desired level