EUR/JPY nosedives below 127.00 on shelling at Europe’s largest nuclear power station in Ukraine

• EUR/JPY plunges below 11-months low near 127.00 amid escalation in the Russia-Ukraine war.
• The shelling of Europe’s largest nuclear power station in Ukraine has raised the odds of a nuclear attack.
• The expectations of a ceasefire between the Kremlin and Kyiv have diluted further.

The EUR/JPY is finding no grounds amid the expansion of uncertainty as the Russian troops are shelling Europe's largest nuclear power station in Ukraine. The cross has plunged near 127.00 after the headline kicks in. This has brought a fresh wave of in the risk-aversion theme, which has underpinned the Japanese yen against the shared currency.

The attack on Europe’s largest nuclear power station has escalated the geopolitical tensions further. At once, the market participants were expecting a ceasefire from the Russian leader Vladimir Putin as the Ukrainian military was barricading the Russian military to attain dominance. Adding to that, the Ukrainian military is accessing news weapons from the West every day, which is fulfilling the arsenal requirements of Ukraine.

The implications of shelling at the nuclear power station may bring more sanctions on Russia by the West and more weaponry and financial aid to Ukraine that may strengthen Kyiv to counter Moscow strongly.

The peace talks between Russia and Ukraine on Thursday brought an indication of a truce between the nations as the former agreed to allow the Ukrainian civilians to move to a safe passage. The attack on the nuclear power plant has fade-off the hopes of a ceasefire and a fresh wave in the risk-aversion theme has underpinned the safe-haven appeal.

Although the headlines from the Russia-Ukraine war will remain a major driver going forward, investors will also focus on the Retail Sales by Eurostat, which is due on Friday.