EUR/JPY slides to near 171.00 as US-EU deal weakens Euro

• EUR/JPY falls sharply to near 171.00 dur to continuous underperformance from the Euro.
• Investors await the flash Eurozone inflation data for July.
• The BoJ is expected to leave interest rates steady on Thursday.

The EUR/JPY pair slumps to near 171.00 during the Asian trading session on Wednesday. The pair falls sharply as the Euro (EUR) continues to underperform its peers, following the announcement of a trade agreement between the United States (US) and the European Union (EU) on Sunday.

Officials from the US and the EU agreed to a 15% baseline tariff rate on Brussels, which is similar to what Washington has imposed on Japan. The 15% baseline tariff rate is half of what US President Donald Trump threatened in the mid of the month.

"While the U.S. dollar's strength may reflect the perception that the new US-EU deal is lopsided in favour of the US, analysts at Macquarie group said, Reuters reported.

In Eurozone, investors await the preliminary Harmonized Index of Consumer Prices (HICP) data for July from the shared continent and its major economies. Price pressures are expected to have grown at a moderate pace.

In Japan, investors await the announcement of the Bank of Japan's (BoJ) monetary policy on Thursday. The BoJ is expected to leave interest rates steady at 0.5%. Investors will pay close attention to BoJ's guidance on the interest rate outlook in the remainder of the year.

The tariff deal between the US and Japan is expected to be a big relief for BoJ officials, which has diminished uncertainty surrounding the economic outlook.