EUR/JPY holds gains above 173.00 following Tokyo CPI data
- EUR/JPY remains stronger after the release of the Tokyo Consumer Price Index data on Friday.
- The headline Tokyo Consumer Price Index rose 2.9% year-over-year in July, against the 3.1% prior.
- The ECB stressed that more economic data is needed before it can offer clearer guidance on its policy outlook.
EUR/JPY extends its winning streak for the seventh successive session, trading around 173.10 during the Asian hours on Friday. The currency cross appreciates as the Japanese Yen (JPY) faces challenges following the release of Tokyo Consumer Price Index (CPI) data.
The Statistics Bureau of Japan showed the headline Tokyo Consumer Price Index for July climbed 2.9% year-over-year, as compared to 3.1% in the previous month. CPI ex Fresh Food climbed 2.9% YoY in July against 3.0% expected and down from 3.1% in the prior month. The CPI ex Fresh Food, Energy rose 2.9% YoY in July, compared to the previous reading of 3.1%.
However, Tokyo’s core inflation for July came in slightly below expectations but stayed well above the Bank of Japan’s (BoJ) 2% target, strengthening expectations for another rate hike later this year.
The European Central Bank (ECB) left interest rates unchanged on Thursday, stating that disinflation is progressing in line with its earlier projections. The interest rate on the main refinancing operations, the interest rates on the marginal lending facility and the deposit facility stood at 2.15%, 2.4% and 2%, respectively.
The ECB emphasized the need for additional data on economic developments before providing further clarity on its policy outlook, including factors such as a potential trade agreement with the United States (US). Markets scaled back expectations for rate cuts this year after ECB President Christine Lagarde indicated that such moves may not be warranted.
Economic Indicator
Tokyo Consumer Price Index (YoY)
The Tokyo Consumer Price Index (CPI), released by the Statistics Bureau of Japan on a monthly basis, measures the price fluctuation of goods and services purchased by households in the Tokyo region. The index is widely considered as a leading indicator of Japan’s overall CPI as it is published weeks before the nationwide reading. The YoY reading compares prices in the reference month to the same month a year earlier. Generally, a high reading is seen as bullish for the Japanese Yen (JPY), while a low reading is seen as bearish.
Read more.Last release: Thu Jul 24, 2025 23:30
Frequency: Monthly
Actual: 2.9%
Consensus: -
Previous: 3.1%
Source: Statistics Bureau of Japan
Author
Akhtar Faruqui
FXStreet
Akhtar Faruqui is a Forex Analyst based in New Delhi, India. With a keen eye for market trends and a passion for dissecting complex financial dynamics, he is dedicated to delivering accurate and insightful Forex news and analysis.
