EUR/JPY holds losses near 170.00 after BoJ policy, German HICP data awaited
- EUR/JPY struggles following the release of the Bank of Japan’s interest rate decision on Thursday.
- The BoJ decided to keep its interest rates unchanged in July, as expected.
- Traders await German Consumer Price Index and Harmonized Index of Consumer Prices data due later in the day.
EUR/JPY continues its losing streak for the fourth consecutive day, trading around 169.90 during the Asian session on Thursday. The currency cross loses ground following the release of the Bank of Japan’s (BoJ) interest rate decision. Traders will likely observe the largest economy in the Eurozone, Germany’s Consumer Price Index (CPI) and Harmonized Index of Consumer Prices (HICP) data due on Thursday.
The BoJ board members maintained the short-term interest rate target in the range of 0.40%- 0.50% on Thursday, as expected. The Japanese central bank extended the pause into the fourth consecutive meeting after having hiked the interest rate by 25 basis points (bps) to 0.50% in January.
The BoJ’s quarterly Outlook Report indicated that underlying inflation is likely to stall due to slowing economic growth but is expected to gradually accelerate thereafter. Uncertainty remains high regarding trade policy developments and their potential impact on the economy. The Bank will continue to raise the policy rate if economic conditions and prices evolve in line with its forecasts.
The Eurozone economy grew a modest 0.1% in Q2, slowing sharply from 0.6% in Q1 but still exceeding expectations of no growth. Traders express caution that the recently announced United States (US)-European Union (EU) trade agreement disproportionately benefits the US. Market expectations for ECB rate cuts have been delayed, with markets now assigning a 90% probability of a 25bps cut by March 2026.
Economic Indicator
BoJ Interest Rate Decision
The Bank of Japan (BoJ) announces its interest rate decision after each of the Bank’s eight scheduled annual meetings. Generally, if the BoJ is hawkish about the inflationary outlook of the economy and raises interest rates it is bullish for the Japanese Yen (JPY). Likewise, if the BoJ has a dovish view on the Japanese economy and keeps interest rates unchanged, or cuts them, it is usually bearish for JPY.
Read more.Last release: Thu Jul 31, 2025 02:57
Frequency: Irregular
Actual: 0.5%
Consensus: 0.5%
Previous: 0.5%
Source: Bank 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.
