EUR/JPY is on the bid post the Japanese CPI data that is warning us that the BoJ may be forced to act. EUR/JPY has been consolidating the upside of late, from the rally that commenced down at 122.26 yesterday. The upside reached a high of 124.63 as the dollar made traction and rallied vs the Yen up towards the 200 sma on the hourly sticks at 113.07 currently. Japan: Inflation still light years from BOJ target The CPI's arrived as 0.0% y/y vs expected 0.0% and prior +0.2%, core inflation (excluding Fresh Food) stood at 0.0% y/y v expected 0.0% and prior 0.1%, while CPI excluding Food, Energy came at 0.7% y/y vs expected 0.7% and prior 0.8%. EUR/JPY still a bearish play? However, despite the problems that the BoJ are facing with the Japanese economy, the ECB also has a task at hand and that has been evident in recent sessions in the falls that we have seen in EUR/JPY that have accelerated taking the pair back to levels not seen since 2013. "It is possible that ECB Draghi will leverage the softer tone of the EUR, but underpinning his dovish position at the March 10 policy meeting. EUR/JPY has already dropped by 5.8% percent so far this year. We see scope for further downside towards the EUR/JPY 122 area," explained analysts at Rabobank. EUR/JPY levels With 122.00 a key target, the bulls will not be out of the woods until at least 126.00 on a rally through the 200 sma on the hourly sticks at 125.33 and a score through the 50 dma at 125.25. For more information, read our latest forex news.