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EUR/JPY edges lower as Eurozone recovery meets intervention-supported Yen

  • EUR/JPY trades around 184.00 with a slight decline at the start of the week.
  • Eurozone economic indicators point to improving activity and sentiment.
  • The JPY remains supported by intervention speculation and geopolitical tensions.

EUR/JPY trades around 184.00 on Monday, down slightly by 0.04% at the time of writing, as contrasting fundamentals persist between a resilient Eurozone and a Japanese Yen (JPY) supported by defensive flows.

On the European side, recent macroeconomic data provide some support to the single currency. The Eurozone S&P Global Manufacturing Purchasing Managers Index (PMI) confirmed a rise to 52.2 in April, reaching its highest level in nearly four years and indicating an expansion in industrial activity. At the same time, the Sentix Investor Confidence Index improved to -16.4 in May from -19.2 previously, pointing to a modest rebound in investor morale despite remaining in negative territory. However, Germany continues to weigh on the outlook, with a deterioration in its domestic component highlighting internal divergences within the bloc.

From a monetary policy perspective, the European Central Bank (ECB) is adopting an increasingly hawkish tone. Governing Council member Peter Kazimir stated that policy tightening in June is all but inevitable, citing persistent inflationary pressures, particularly from energy prices. This stance aligns with projections from the ECB Survey of Professional Forecasters, which sees inflation averaging 2.7% this year before gradually returning to the 2% target. However, growth expectations are slightly revised lower, with Gross Domestic Product (GDP) forecast to expand by 1% in 2026.

Against this backdrop, market attention now turns to upcoming speeches from ECB officials, following last week’s decision to keep interest rates unchanged.

On the Japanese side, the Japanese Yen (JPY) receives notable support at the start of the week. Recent price action in foreign exchange markets suggests a possible intervention by Japanese authorities to support the currency, particularly after USD/JPY crossed the key 160.00 threshold. According to Reuters, the Bank of Japan (BoJ) may have already spent around 5.48 trillion JPY to stabilize the currency. While the Ministry of Finance remains silent, the synchronized movements across Japanese Yen crosses reinforce these suspicions.

However, the Japanese Yen’s upside potential remains limited by the broader geopolitical environment. Ongoing tensions in the Middle East and disruptions in the Strait of Hormuz support elevated Oil prices and sustain global uncertainty, discouraging aggressive bullish positioning on the Japanese currency. Announcements by US President Donald Trump regarding a maritime security initiative have had a muted market impact, while tensions with Iran continue to weigh on sentiment.

Japanese Yen Price Today

The table below shows the percentage change of Japanese Yen (JPY) against listed major currencies today. Japanese Yen was the strongest against the British Pound.

USDEURGBPJPYCADAUDNZDCHF
USD0.00%0.12%-0.06%0.10%0.04%-0.04%0.13%
EUR-0.01%0.08%-0.07%0.10%0.04%-0.05%0.10%
GBP-0.12%-0.08%-0.15%0.02%-0.04%-0.15%0.04%
JPY0.06%0.07%0.15%0.14%0.05%-0.03%0.13%
CAD-0.10%-0.10%-0.02%-0.14%-0.09%-0.17%0.02%
AUD-0.04%-0.04%0.04%-0.05%0.09%-0.12%0.07%
NZD0.04%0.05%0.15%0.03%0.17%0.12%0.18%
CHF-0.13%-0.10%-0.04%-0.13%-0.02%-0.07%-0.18%

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Japanese Yen from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent JPY (base)/USD (quote).

Author

Ghiles Guezout

Ghiles Guezout is a Market Analyst with a strong background in stock market investments, trading, and cryptocurrencies. He combines fundamental and technical analysis skills to identify market opportunities.

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