• EUR/JPY plummets around 450 pips intraday and is pressured by a combination of factors.
• Ishiba wins the LDP presidential election to become Japan's Prime Minister and boosts the JPY. 
• Sofer French, and Spanish CPI prints weigh on the Euro and further exerts pressure on the cross.

The EUR/JPY cross witnessed a dramatic intraday turnaround and tumbled around 450 pips from its highest level since August 16 set earlier this Friday. The downward trajectory drags spot prices to a fresh weekly low during the first half of the European session, though stalls near the 159.00 round-figure mark. 

The Japanese Yen (JPY) rallies across the board after former Défense Chief Shigeru Ishiba beat Sanae Takaichi to become the next leader of the ruling Liberal Democratic Party (LDP) and secure the role of Japan’s Prime Minister on his fifth attempt. The news was taken positively by the JPY bulls as was the one who had been vocal in scrutinizing the Bank of Japan (BoJ) for hiking rates too fast. This turned out to be a key trigger behind the initial leg of a sharp intraday downfall for the EUR/JPY cross. 

The selling bias picked up pace following the release of softer consumer inflation figures from France and Spain. The preliminary data from statistics agency INSEE showed that French consumer prices rose less than anticipated and the harmonized inflation rate increased 1.5% YoY in September, down from 2.2% in the previous month. Adding to this, the flash indicator prepared by the NSI revealed that the Spanish Consumer Price Index (CPI) decelerated to the 1.5% YoY rate from 2.3% in August.

The softer data reaffirmed market bets for at least a 25 basis points (bps) interest rate cut by the European Central Bank (ECB) at its next policy meeting in October. This, in turn, weighs heavily on the shared currency and further contributes to the EUR/JPY pair's downfall. Meanwhile, core inflation in Tokyo – Japan's capital – matched the BoJ's 2% target in September, which, along with the risk-on mood, caps gains for the safe-haven JPY and assists the cross to rebound to the 159.40-159.50 area.