EUR/JPY Price Forecast: Keeps bullish vibe above 100-day EMA
The EUR/JPY inferior loses traction just about 184.50 at some level of the early European session on Thursday. The Japanese Yen (JPY) edges better towards the Euro (EUR) as traders dwell cautious of intervention after true warnings ahead of an election in Japan. Japan’s Finance Minister Satsuki Katayama issued one other verbal warning on Wednesday, pronouncing officers would elevate “appropriate action against excessive FX moves without excluding any options.”
On the other hand, signs that the European Central Bank (ECB) appears to be near the end of its rate-cutting cycle could provide some support to the EUR. Financial markets currently see limited scope for immediate action, with a chance of rates remaining unchanged at the next meeting. Some analysts expect a rate reduction later in 2026, though a hike is considered unlikely given the subdued inflation backdrop.
Technical Analysis:
In the daily chart, EUR/JPY holds above the rising 100 EMA at 179.01, maintaining an upside bias. Price trades in the upper half of the Bollinger envelope and the bands show mild contraction, flagging a pause within the advance. RSI at 59.76 is neutral-bullish, showing firm momentum. Immediate resistance stands at the upper band at 185.20, while initial support rests at 184.00.
A daily close above 185.20 could extend the move as volatility rebuilds from the recent band contraction. Failure to clear that cap would expose the lower band at 182.76, and a deeper pullback would test the 100 EMA at 179.01. RSI holding above 50 would favor continuation, while a drop toward that threshold would point to consolidation within the range.
(The technical analysis of this story was written with the help of an AI tool.)
Japanese Yen FAQs
The Japanese Yen (JPY) is one among the sector’s most traded currencies. Its rate is broadly sure by the performance of the Japanese economy, but extra particularly by the Bank of Japan’s policy, the differential between Japanese and US bond yields, or likelihood sentiment amongst traders, amongst diversified factors.
In point of fact apt one of many Bank of Japan’s mandates is currency merit watch over, so its moves are key for the Yen. The BoJ has straight intervened in currency markets usually, usually to decrease the associated charge of the Yen, even supposing it refrains from doing it continually due to political considerations of its significant trading companions. The BoJ extremely-loose financial policy between 2013 and 2024 precipitated the Yen to depreciate towards its significant currency peers due to an increasing policy divergence between the Bank of Japan and diversified significant central banks. Extra currently, the step by step unwinding of this extremely-loose policy has given some strengthen to the Yen.
Over the final decade, the BoJ’s stance of sticking to extremely-loose financial policy has led to a widening policy divergence with diversified central banks, particularly with the US Federal Reserve. This supported a widening of the differential between the 10-year US and Japanese bonds, which favored the US Dollar towards the Japanese Yen. The BoJ resolution in 2024 to step by step abandon the extremely-loose policy, coupled with curiosity-rate cuts in diversified predominant central banks, is narrowing this differential.
The Japanese Yen is continually viewed as a true-haven funding. This implies that in times of market stress, investors usually have a tendency to position their cash in the Japanese currency due to its supposed reliability and steadiness. Turbulent times are inclined to enhance the Yen’s rate towards diversified currencies viewed as extra unsafe to put money into.
