EUR/JPY slips near 179.50 after less disappointing Japan’s preliminary Q3 GDP data

EUR/JPY depreciates as the Japanese Yen holds gains after Japan’s preliminary Q3 GDP data came in less negative.
Japan’s preliminary GDP declined 0.4% QoQ in Q3, beating expectations for a 0.6% drop.
The Euro may also regain support amid cautious sentiment over the ECB’s near-term monetary policy outlook.

Akhtar Faruqui FXStreet

EUR/JPY extends its losses for the second consecutive day after pulling back from a record high of 179.97 reached in the previous session, trading around 179.40 during the Asian hours on Monday. The currency cross remains subdued as the Japanese Yen (JPY) holds ground after the release of better-than-expected Japan’s Gross Domestic Product (GDP) data for the third quarter.

Japan’s preliminary GDP fell 0.4% quarter-over-quarter (QoQ) in Q3 2025, reversing the 0.6% growth seen in Q2 but outperforming expectations for a 0.6% contraction. On an annualized basis, the economy shrank 1.8%, a smaller drop than the anticipated 2.5% decline, following a slightly revised 2.3% expansion in the previous quarter.

However, the JPY could face challenges as Prime Minister Sanae Takaichi urged the Bank of Japan (BoJ) to keep interest rates low, stressing that monetary policy must continue supporting solid economic growth and stable inflation.

Meanwhile, BoJ Governor Kazuo Ueda pointed to firm consumption driven by rising household incomes and a tightening labor market, adding that underlying inflation is steadily moving toward the central bank’s 2% target, signaling that a rate hike remains a near-term possibility.

The EUR/JPY cross may regain its ground as the Euro (EUR) could further receive support from the cautious sentiment surrounding the near-term European Central Bank’s (ECB) monetary policy outlook. The ECB is widely expected to keep rates unchanged, supported by stable economic performance and inflation near target.

Bloomberg reported on Saturday that European Central Bank (ECB) Governing Council Member Olli Rehn cautioned that the risk of slowing inflation should not be overlooked, though upside risks remain. Rehn noted that the euro-area economy is holding up despite disruptions from the Trump administration’s tariff policies, with growth slow but steady. He also emphasized the need for strong bank buffers and a vigilant policy stance.

Economic Indicator

Gross Domestic Product (QoQ)

The Gross Domestic Product (GDP), released by Japan’s Cabinet Office on a quarterly basis, is a measure of the total value of all goods and services produced in Japan during a given period. The GDP is considered as the main measure of Japan’s economic activity. The QoQ reading compares economic activity in the reference quarter to the previous quarter. Generally, a high reading is seen as bullish for the Japanese Yen (JPY), while a low reading is seen as bearish.

GBP/USD turns negative; slips back to 1.3530

GBP/USD comes under pressure and weakens toward the 1.3530 zone on Tuesday. Cable thus leaves behind two daily upticks in a row and retreats further from Monday’s multi-week tops past 1.3570 following humble gains in the Greenback and disheartening UK jobs data.

EUR/USD back to square one near 1.1580

EUR/USD trims its earlier gains and retests the 1.1580 region in the latter part of the NA session on Tuesday. Indeed, the pair falls into the generalised consolidative theme prevailing in the FX space amid marginal gains in the US Dollar, steady uncertainty in the geopolitical landscape and diminishing bets for further Fed rate hikes.

Gold remains offered around $4,350

Gold accelerates its daily correction and revisits the $4,350 zone per troy ounce on Tuesday. The precious metal sets aside two daily advances in a row and follows the absence of direction in the US Dollar, declining US Treasury yields across the curve and continuous uncertainty in the Middle East crisis.

Crypto Today: Bitcoin, Ethereum, XRP falter amid escalating US-Iran tensions

Cryptocurrency prices are broadly correcting on Tuesday, with Bitcoin edging lower toward $64,000. Ethereum shows weakness amid ongoing narrow-range consolidation, while Ripple trades below $1.00, weighed down by falling technical indicators.

Fiscal concerns and doubts on Fed independence send US yields to long-term highs

US Treasury yields keep rising across the curve this week, with the yield for the 30-year Treasury bond reaching its highest level since 2007, during the global financial crisis, at 5.33% so far on Monday. A mix of concerns about the ballooning US fiscal deficit and growing doubts about the Federal Reserve’s Independence are increasing pressure on US Government Bonds.

Why is Crude Oil priced for a reopening the ships haven't made?

Fourteen vessels crossed the Strait of Hormuz on Tuesday. Before the war, the count ran near 120 a day. In the sessions since the waterway was publicly declared open, Brent has drifted back to $87 and West Texas Intermediate (WTI) to $81, both a little lower again on Wednesday, with daily momentum on each unwound from the top of its range in late July to the low twenties now.