EUR/JPY Price Forecast: Keeps bullish vibe above 100-day EMA
- EUR/JPY softens to around 184.50 in Thursday’s early European session.
- The positive outlook of the cross remains intact above the key 100-day EMA.
- The first upside barrier to watch is 185.20; the initial support emerges at 184.00.
The EUR/JPY cross loses traction near 184.50 during the early European session on Thursday. The Japanese Yen (JPY) edges higher against the Euro (EUR) as traders remain wary of intervention after strong warnings ahead of an election in Japan. Japan’s Finance Minister Satsuki Katayama issued another verbal warning on Wednesday, saying officials would take "appropriate action against excessive FX moves without excluding any options.”
On the other hand, signs that the European Central Bank (ECB) appears to be near the end of its rate-cutting cycle could provide some support to the EUR. Financial markets currently see limited scope for immediate action, with a chance of rates remaining unchanged at the next meeting. Some analysts expect a rate reduction later in 2026, though a hike is considered unlikely given the subdued inflation backdrop.
Technical Analysis:
In the daily chart, EUR/JPY holds above the rising 100 EMA at 179.01, maintaining an upside bias. Price trades in the upper half of the Bollinger envelope and the bands show mild contraction, flagging a pause within the advance. RSI at 59.76 is neutral-bullish, showing firm momentum. Immediate resistance stands at the upper band at 185.20, while initial support rests at 184.00.
A daily close above 185.20 could extend the move as volatility rebuilds from the recent band contraction. Failure to clear that cap would expose the lower band at 182.76, and a deeper pullback would test the 100 EMA at 179.01. RSI holding above 50 would favor continuation, while a drop toward that threshold would point to consolidation within the range.
(The technical analysis of this story was written with the help of an AI tool.)
Japanese Yen FAQs
The Japanese Yen (JPY) is one of the world’s most traded currencies. Its value is broadly determined by the performance of the Japanese economy, but more specifically by the Bank of Japan’s policy, the differential between Japanese and US bond yields, or risk sentiment among traders, among other factors.
One of the Bank of Japan’s mandates is currency control, so its moves are key for the Yen. The BoJ has directly intervened in currency markets sometimes, generally to lower the value of the Yen, although it refrains from doing it often due to political concerns of its main trading partners. The BoJ ultra-loose monetary policy between 2013 and 2024 caused the Yen to depreciate against its main currency peers due to an increasing policy divergence between the Bank of Japan and other main central banks. More recently, the gradually unwinding of this ultra-loose policy has given some support to the Yen.
Over the last decade, the BoJ’s stance of sticking to ultra-loose monetary policy has led to a widening policy divergence with other central banks, particularly with the US Federal Reserve. This supported a widening of the differential between the 10-year US and Japanese bonds, which favored the US Dollar against the Japanese Yen. The BoJ decision in 2024 to gradually abandon the ultra-loose policy, coupled with interest-rate cuts in other major central banks, is narrowing this differential.
The Japanese Yen is often seen as a safe-haven investment. This means that in times of market stress, investors are more likely to put their money in the Japanese currency due to its supposed reliability and stability. Turbulent times are likely to strengthen the Yen’s value against other currencies seen as more risky to invest in.
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