- EUR/JPY slides to near 161.60 as the Euro faces selling pressure ahead of the ECB policy meeting on Thursday.
- The ECB is almost certain to cut its Deposit Facility rate by 25 bps to 2.75%.
- Growing bets towards more interest rate hikes from the BoJ this year have boosted the Japanese Yen.
The EUR/JPY pair slumps to near two-day low of 161.60 in Wednesday’s European session. The cross faces a sharp selling pressure as the Euro (EUR) underperforms its major peers, except antipodeans, as market participants are confident that the European Central Bank (ECB) will cut its Deposit Rate by 25 basis points (bps) to 2.75%. This would be the fourth straight interest rate cut by the ECB in a row.
Investors have also priced in three more interest rate cuts of 25 bps in the upcoming three meetings amid fears that the imposition of tariffs by the United States (US) on the Eurozone would weaken its economic outlook. A majority of ECB officials are also comfortable with market expectations for four interest rate cuts this year due to deepening risks of inflation undershooting the central bank’s target of 2%. The completion of four interest rate cuts would push the Deposit rate lower to 2%.
Few ECB officials have considered 2% a neutral rate, which neither stimulates nor weighs on economic growth.
Meanwhile, the Japanese Yen (JPY) performs strongly across the board amid growing speculation that the Bank of Japan (BoJ) will raise interest rates further this year on hopes of higher wage growth outlook.
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 Australian Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.23% | 0.14% | -0.12% | 0.19% | 0.43% | 0.35% | 0.19% | |
| EUR | -0.23% | -0.10% | -0.32% | -0.05% | 0.18% | 0.13% | -0.05% | |
| GBP | -0.14% | 0.10% | -0.27% | 0.06% | 0.29% | 0.21% | 0.05% | |
| JPY | 0.12% | 0.32% | 0.27% | 0.31% | 0.55% | 0.45% | 0.30% | |
| CAD | -0.19% | 0.05% | -0.06% | -0.31% | 0.24% | 0.15% | -0.01% | |
| AUD | -0.43% | -0.18% | -0.29% | -0.55% | -0.24% | -0.08% | -0.24% | |
| NZD | -0.35% | -0.13% | -0.21% | -0.45% | -0.15% | 0.08% | -0.16% | |
| CHF | -0.19% | 0.05% | -0.05% | -0.30% | 0.00% | 0.24% | 0.16% |
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).
EUR/JPY trades in a Descending Triangle chart pattern on a daily timeframe, which indicates indecisiveness among market participants. The horizontal border of the chart pattern is plotted from the December 13 low of 159.65, while the downward-sloping border is placed from the December 30 high of 164.90.
The 20-day Exponential Moving Average (EMA) appears to be sticky to the asset’s price near 162.17, suggesting a sideways trend.
The 14-day Relative Strength Index (RSI) oscillates in the 40.00-60.00 range, which indicates a sharp volatility contraction.
A fresh upside move toward the December 30 high of 164.90 and the November 6 high of 166.10 would appear if the asset breaks decisively above the January 24 high of 164.08.
On the flip side, a downside move below the January 16 low of 159.74 would expose the asset to the December 11 low of 158.65, followed by the December 9 low of 157.87.
EUR/JPY daily chart
Economic Indicator
ECB Rate On Deposit Facility
One of the European Central Bank's three key interest rates, the rate on the deposit facility, is the rate at which banks earn interest when they deposit funds with the ECB. It is announced by the European Central Bank at each of its eight scheduled annual meetings.
Read more.Next release: Thu Jan 30, 2025 13:15
Frequency: Irregular
Consensus: 2.75%
Previous: 3%
Source: European Central Bank
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
AUD/USD climbs above 0.6200 amid broad USD weakness and trade jitters
The Australian Dollar extended its advance on Thursday, climbing toward the 0.6240 zone. The pair built on recent strength as the US Dollar Index slid further toward multi-month lows near the 101 area. This move came after markets digested the White House’s confirmation of a steep 145% tariff on Chinese goods, combined with a cautious Federal Reserve tone.
EUR/USD surges higher as tariff walk-back eases tensions further
EUR/USD roared into its highest bids in nearly two years on Thursday, breaching and closing above the 1.1200 handle for the first time in 21 months. Market tensions continue to ease following the Trump administration’s last-minute pivot away from its own tariffs, sparking a softening in US Dollar flows.
Gold rises to record high near $3,200 on US-China tariff war
Gold price surges to near an all-time high around $3,190 during the early Asian session on Friday. The weakening of the US Dollar and escalating trade war between the United States and China provide some support to the precious metal.
Bitcoin miners scurry to import mining equipment following Trump's China tariffs
Bitcoin miners are reportedly scrambling to import mining equipment into the United States following rising tariff tensions in the US-China trade war, according to a Blockspace report on Wednesday.
Trump’s tariff pause sparks rally – What comes next?
Markets staged a dramatic reversal Wednesday, led by a 12% surge in the Nasdaq and strong gains across major indices, following President Trump’s unexpected decision to pause tariff escalation for non-retaliating trade partners.
The Best brokers to trade EUR/USD
SPONSORED Discover the top brokers for trading EUR/USD in 2025. Our list features brokers with competitive spreads, fast execution, and powerful platforms. Whether you're a beginner or an expert, find the right partner to navigate the dynamic Forex market.