EUR/JPY trades firmly near 176.00 amid Japan-France political jolts
- EUR/JPY exhibits strength near its all-time high around 176.00 amid weakness in the Japanese Yen.
- The election of fiscal dove Sanae Takaichi as Japan’s Prime Minister has increased the odds of loosening monetary conditions.
- The French economy faces a deeper political crisis after PM Sebastien Lecornu’s sudden resignation.
The EUR/JPY pair demonstrates strength near the all-time high around 176.00 during Tuesday’s late Asian session, posted on Monday. The pair strengthens as the Japanese Yen (JPY) underperforms across the board since Sanae Takaichi has been elected as Prime Minister by Japan’s ruling party.
Japanese Yen Price Today
The table below shows the percentage change of Japanese Yen (JPY) against listed major currencies today. Japanese Yen was the weakest against the Swiss Franc.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.17% | 0.15% | 0.09% | 0.05% | 0.08% | 0.32% | 0.02% | |
| EUR | -0.17% | -0.02% | -0.05% | -0.12% | -0.07% | 0.15% | -0.03% | |
| GBP | -0.15% | 0.02% | -0.04% | -0.07% | -0.00% | 0.13% | -0.01% | |
| JPY | -0.09% | 0.05% | 0.04% | -0.03% | 0.03% | 0.13% | -0.10% | |
| CAD | -0.05% | 0.12% | 0.07% | 0.03% | 0.02% | 0.23% | 0.09% | |
| AUD | -0.08% | 0.07% | 0.00% | -0.03% | -0.02% | 0.07% | -0.01% | |
| NZD | -0.32% | -0.15% | -0.13% | -0.13% | -0.23% | -0.07% | -0.23% | |
| CHF | -0.02% | 0.03% | 0.00% | 0.10% | -0.09% | 0.00% | 0.23% |
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).
The Japanese currency has been facing significant pressure as investors factor in Takaichi’s leadership to boost fiscal spending and support loosening monetary policy conditions. This would diminish hopes of more interest rate cuts by the Bank of Japan (BoJ) in the remainder of the year.
A decent upside move in the Japanese Yen was witnessed in the past few weeks amid growing acceptance that the BoJ will remain on its path towards policy normalization, as officials signaled that the trade war risk won’t derail their interest rate hiking plans.
Going forward, the major trigger for the Japanese Yen will be the speech from BoJ Governor Kazuo Ueda on Wednesday. BoJ’s Ueda is expected to provide fresh cues about whether the central bank will stick to its monetary policy tightening plans.
Though investors have underpinned the Euro (EUR) against the Japanese Yen, the former is underperforming its other peers due to the surprise resignation of as France’s prime minister. The shocking resignation of Lecornu after the appointment of the new cabinet has pushed the economy into a deeper political crisis. The impact of the political crisis in France is unfavourable for the Euro (EUR), given that the French economy is the second-largest of the Eurozone in terms of business.
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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