Euro edges higher against the Japanese Yen following BoJ monetary policy decision

• EUR/JPY ticks up to the 176.40 area, approaching weekly highs at 176.60.
• The Bank of Japan left interest rates on hold and cast doubt on a December rate hike.
• In Europe, German import prices and France's CPI beat expectations in September.

The Euro (EUR) extends gains for the third consecutive day against the Japanese Yen (JPY) on Friday, as investors ponder the cautious tone of the Bank of Japan’s (BoJ) monetary policy statement. The EUR/JPY trades at 176.40 at the time of writing, with the weekly high of 176.60 on sight, although it remains practically flat on the weekly chart.

The BoJ met expectations and left its benchmark interest rate on hold at 1.25% after its monetary policy meeting on Friday. The bank’s statement affirmed that underlying inflation has reached the 2% target and projected a median core CPI of 2.5% in 2026 and 2.7% in 2027.

The statement also reinforced the bank’s commitment to keep inflation anchored but showed a cautious tone on further interest rate hikes, conditioning them on developments in FX markets, AI and the Middle East. This stance was echoed at Governor Kazuho Ueda’s press conference, and triggered a slight JPY pullback against its main peers.

Inflation grows beyond expectations in Germany and France

In the Eurozone, the German Import Price Index beat expectations in September with a 2.1% advance and a 10.4% year-on-year gain from 1% and 8.3% respective increases in August.

France’s Consumer Price Index (CPI), released shortly afterwards, has shown a similar outcome, with monthly inflation growing 0.4% after a 0.3% contraction in August and the yearly rate accelerating to 3.8% from 3.4%, above the 3.6% market consensus.

On Thursday, the European Central Bank left interest rates on hold, as expected, and President Christine Lagarde announced an early exit in February 2027. The bank stated that energy prices keep boosting inflation and hampering economic growth but also observed that financial conditions "have tightened since the Governing Council's last meeting, which is likely to weigh on inflation and growth." The Euro edged up against its main peers following the event.