• EUR/JPY trades on a weaker note around 162.85 in Monday’s early European session. 
• ECB's Stournaras said the central bank won’t have enough data to decide on rate cuts until June. 
• A technical recession in Japan might prompt the BoJ to delay an exit from negative rates, which exerts some pressure on the JPY. 

The EUR/JPY cross holds below the 163.00 mark during the early European session on Monday. The concern about a technical recession in Japan and the risk-on mood weigh on the Japanese Yen (JPY). However, the warning from Japanese authorities to intervene in the FX market might cap the downside of the JPY. The cross currently trades near 162.85, down 0.01% on the day. 

The European Central Bank (ECB) Governing Council member Yannis Stournaras said on Friday that the central bank won’t have enough data to decide on interest-rate cuts until June, despite inflation seeming to be on pace to reach the 2% target this year. Meanwhile, ECB policymaker Mario Centeno said the central bank might be ready to consider cutting rates next month, if data call for it, even if that’s only a low-probability event. That being said, the divergence of monetary policy between the ECB and the Bank of Japan (BoJ) provides some support to the Euro (EUR) and acts as a headwind for the EUR/JPY cross. 

On the other hand, Japan entered a technical recession as its Gross Domestic Product (GDP) unexpectedly contracted for two consecutive quarters and surrendered its position as the world's third-largest economy to Germany. The weaker GDP growth number might convince the BoJ to delay an exit from negative rates. This, in turn, drags the JPY lower against its rivals.

However, verbal intervention from the Japanese authorities might lift the JPY. Japan's Finance Minister Shunichi Suzuki said last week that the government is closely watching FX moves with a high sense of urgency. 

The Japan’s Consumer Price Index (CPI) for January will be due on Tuesday. On Thursday, the German Retail Sales and CPI data will be released. The attention will shift to the Eurozone Harmonized Index of Consumer Prices (HICP) data on Friday. Traders will take cues from the data and find trading opportunities around the EUR/JPY cross.