EUR/JPY Price Forecast: Slips below 178.00 as bearish bias strengthens
- EUR/JPY may fall toward the lower boundary of the descending channel at 176.90.
- The 14-day Relative Strength Index is at 31.77 and approaches oversold territory.
- The immediate barrier lies at the nine-day EMA at 179.13.
EUR/JPY remains subdued for the fourth successive day, trading around 177.70 during Asian hours on Wednesday. Technical analysis of the daily chart shows that the currency cross remains confined within a descending channel pattern. This continuous formation reinforces a persistent bearish outlook for the pair.
The EUR/JPY cross is holding a bearish near-term bias as it remains below both the nine- and 50-period Exponential Moving Averages (EMAs). The short-term EMA staying under the longer one while price trades beneath them suggests the cross is capped by a layered moving-average ceiling, even as the 14-day Relative Strength Index (RSI) at 31.77 flirts with oversold territory and hints that selling pressure could be slowing rather than reversing decisively.
The EUR/JPY cross may fall toward the lower boundary of the descending channel at 176.90, followed by an 11-month low of 175.70, recorded in November 2025.
On the upside, the EUR/JPY cross may rebound toward the nine-day EMA at 179.13. A break above the short-term price average could trigger a bullish reversal and support the cross as it tests the 50-day EMA at 181.83. Further resistance lies at the upper boundary of the descending channel around 184.50, followed by the all-time high of 187.95 set on April 17.
Yen outperforms as Japan officials reiterate FX warning
Analysts at Scotiabank highlight the Yen as a standout in G10 trading, noting that it is “the only notable exception” to broader defensive price action. They point to “a clear late Asian-session surge driven by FX-related comments from Japan’s Vice Minister for International Affairs, Atsushi Mimura,” who “reminded market participants to heed last week’s warnings from both PM Takaichi and FinMin Katayama.” This renewed emphasis from senior Japanese officials has underpinned JPY strength on the crosses, in contrast to the softer tone seen elsewhere.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Bank of Japan FAQs
The Bank of Japan (BoJ) is the Japanese central bank, which sets monetary policy in the country. Its mandate is to issue banknotes and carry out currency and monetary control to ensure price stability, which means an inflation target of around 2%.
The Bank of Japan embarked in an ultra-loose monetary policy in 2013 in order to stimulate the economy and fuel inflation amid a low-inflationary environment. The bank’s policy is based on Quantitative and Qualitative Easing (QQE), or printing notes to buy assets such as government or corporate bonds to provide liquidity. In 2016, the bank doubled down on its strategy and further loosened policy by first introducing negative interest rates and then directly controlling the yield of its 10-year government bonds. In March 2024, the BoJ lifted interest rates, effectively retreating from the ultra-loose monetary policy stance.
The Bank’s massive stimulus caused the Yen to depreciate against its main currency peers. This process exacerbated in 2022 and 2023 due to an increasing policy divergence between the Bank of Japan and other main central banks, which opted to increase interest rates sharply to fight decades-high levels of inflation. The BoJ’s policy led to a widening differential with other currencies, dragging down the value of the Yen. This trend partly reversed in 2024, when the BoJ decided to abandon its ultra-loose policy stance.
A weaker Yen and the spike in global energy prices led to an increase in Japanese inflation, which exceeded the BoJ’s 2% target. The prospect of rising salaries in the country – a key element fuelling inflation – also contributed to the move.
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