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EUR/JPY remains near 173.00 following disappointing Eurozone Retail Sales figures

  • EUR/JPY maintains its position despite weaker-than-expected Eurozone Retail Sales data.
  • The Euro receives support as the ECB is expected to keep rates unchanged in September amid persistent Eurozone inflation.
  • The Japanese Yen struggles due to uncertainty over the timing of BoJ rate hikes.

EUR/JPY continues its winning streak for the sixth consecutive session, trading around 172.80 during the European hours on Thursday. The currency cross holds ground after the disappointing Eurozone Retail Sales data, which rose 2.2% year-over-year in July, against the expected 2.4% growth and 3.5% increase prior. Meanwhile, monthly sales declined by 0.5%, worse-than-expected 0.2% decline, and swung from the previous 0.6% increase. Attention will shift toward Eurozone Gross Domestic Product (GDP) for the second quarter and Germany’s July Factory Orders due on Friday.

The Euro (EUR) receives support as persistent inflation in the Eurozone boosted sentiment that the European Central Bank (ECB) will keep interest rates unchanged at September’s meeting. Eurozone Harmonized Index of Consumer Prices (HICP) rose 2.1% YoY in August, above both market expectations and the European Central Bank’s (ECB) 2.0% target.

Additionally, the EUR/JPY cross also draws support as the Japanese Yen (JPY) loses ground against its peers, driven by the uncertainty over the timing and pace of Bank of Japan (BoJ) rate hikes. The BoJ Governor Kazuo Ueda reaffirmed on Wednesday that the policy path for rate hikes remains intact, provided growth and inflation evolve as expected. Investors now await Friday’s wage data for additional policy signals.

Japan’s trade negotiator Ryosei Akazawa noted on Thursday that he was visiting the United States (US) as administrative talks progress. Akazawa further added that he will continue to push for a presidential order for the tariffs that have been agreed on.

The JPY also faces challenges amid mounting Japan’s political instability, after the Secretary-General of the Liberal Democratic Party (LDP), Hiroshi Moriyama, a close ally of Prime Minister Shigeru Ishiba, said on Tuesday that he intends to resign. This has intensified concerns over Ishiba’s leadership as pressure builds after the election loss.

Economic Indicator

Retail Sales (YoY)

The Retail Sales data, released by Eurostat on a monthly basis, measures the volume of retail sales in the Eurozone. It shows the performance of the retail sector in the short term, which accounts for around 5% of the total value added of the Eurozone economies. Retail Sales data is widely followed as an indicator of consumer spending. Percent changes reflect the rate of changes in such sales, with the YoY reading comparing sales volumes in the reference month with the same month a year earlier. Generally, a high reading is seen as bullish for the Euro (EUR), while a low reading is seen as bearish.

Read more.

Last release: Thu Sep 04, 2025 09:00

Frequency: Monthly

Actual: 2.2%

Consensus: 2.4%

Previous: 3.1%

Source: Eurostat

Author

Akhtar Faruqui

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.

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