empty
12.08.2023 01:08 AM
EUR/JPY hits multi-year high

This image is no longer relevant

EUR/JPY reached a multi-year peak on Friday. The cross pair is entering a bullish consolidation phase, just below its highest level since September 2008.

Speculation and expectations that Japanese authorities will intervene in the currency market to support the national currency are preventing traders from placing new optimistic bets on the cross. Moreover, speculation that, following easing inflationary pressure and increasing recession fears, the European Central Bank will halt its series of nine consecutive rate hikes in September also limits the cross's growth.

Nevertheless, the dovish stance taken by the Bank of Japan, which remains the only central bank in the world supporting a negative base interest rate, helps limit the decline of the EUR/JPY pair. Even the Bank of Japan's policy adjustment in July, which made the Yield Curve Control (YCC) policy more flexible and helped raise the yield on 10-year Japanese government bonds to 1%, couldn't bolster the Japanese yen.

Weak wage data from Japan released this week confirmed that the Bank of Japan will maintain negative interest rates until the end of the year. Such a fundamental backdrop showcases a significant divergence in the monetary policies of these countries, given that since July of the previous year, the ECB has increased borrowing costs by a total of 425 basis points.

Consequently, the policy divergence between the Bank of Japan and the ECB suggests that the path of least resistance for the EUR/JPY pair leans towards growth.

Irina Yanina,
Analytical expert of InstaForex
© 2007-2025
Select timeframe
5
min
15
min
30
min
1
hour
4
hours
1
day
1
week
Earn on cryptocurrency rate changes with InstaForex
Download MetaTrader 4 and open your first trade
  • Grand Choice
    Contest by
    InstaForex
    InstaForex always strives to help you
    fulfill your biggest dreams.
    JOIN CONTEST

Recommended Stories

USD/JPY. Analysis and Forecast

Currently, the Japanese yen continues to demonstrate strength against the U.S. dollar, pushing the USD/JPY pair below the key 143.00 level. Expectations that the Bank of Japan will raise interest

Irina Yanina 18:42 2025-06-02 UTC+2

XAU/USD. Analysis and Forecast

The intraday rise in gold prices remains steady today, Monday, with gold reaching over a one-week high around $3359. The weakness of the U.S. dollar, driven by concerns over

Irina Yanina 18:38 2025-06-02 UTC+2

GBP/USD. Analysis and Forecast

The GBP/USD pair is regaining positive momentum at the start of the new week, rebounding on renewed U.S. dollar selling and breaking above the psychological 1.3500 level. Friday's U.S. Personal

Irina Yanina 18:26 2025-06-02 UTC+2

Bitcoin under selling pressure

While the market is busy debating the impact of new stablecoin legislation, the renewed tariff threats from Donald Trump are dampening global risk appetite, pushing BTC/USD lower. After a 50%

Marek Petkovich 14:11 2025-06-02 UTC+2

Market sugarcoats pill

The best May since 1990 and the strongest monthly performance in a year and a half helped sugarcoat the bitter pill for the US stock market. Yet, since the start

Marek Petkovich 12:43 2025-06-02 UTC+2

The ECB Will Face Increasing Challenges

The euro is rising ahead of a significant event. The European Central Bank is expected to cut interest rates this Thursday before increasingly complex inflation prospects risk bringing internal disagreements

Jakub Novak 12:11 2025-06-02 UTC+2

Throughout June, the Markets Will Be as Intense as During the Early Months of Trump's Presidency (there is a likelihood of a continued rise in the price of gold and a fall in USD/JPY)

The challenging month of May was experienced differently across global markets, but the main beneficiaries were stocks, which gained momentum from late April and extended their rally into May—something that

Pati Gani 09:45 2025-06-02 UTC+2

What to Pay Attention to on June 2? A Breakdown of Fundamental Events for Beginners

Quite a few macroeconomic reports are scheduled for Monday, but only one truly important one. This concerns the U.S. ISM Manufacturing PMI. It's worth recalling that two business activity indices

Paolo Greco 06:07 2025-06-02 UTC+2

GBP/USD Overview – June 2: Another Surprise from Donald Trump

The GBP/USD currency pair experienced low volatility on Friday, but last week's events can already be overlooked — Trump never sleeps. Traders barely had time to recover from last Thursday's

Paolo Greco 03:55 2025-06-02 UTC+2

EUR/USD Overview – June 2: The American Circus Gains Momentum

The EUR/USD currency pair traded calmly on Friday, but this calm will not last long. Last week, particularly on Thursday, another storm erupted in the market, caused by a familiar

Paolo Greco 03:55 2025-06-02 UTC+2
Can't speak right now?
Ask your question in the chat.
Widget callback
 

Dear visitor,

Your IP address shows that you are currently located in the USA. If you are a resident of the United States, you are prohibited from using the services of InstaFintech Group including online trading, online transfers, deposit/withdrawal of funds, etc.

If you think you are seeing this message by mistake and your location is not the US, kindly proceed to the website. Otherwise, you must leave the website in order to comply with government restrictions.

Why does your IP address show your location as the USA?

  • - you are using a VPN provided by a hosting company based in the United States;
  • - your IP does not have proper WHOIS records;
  • - an error occurred in the WHOIS geolocation database.

Please confirm whether you are a US resident or not by clicking the relevant button below. If you choose the wrong option, being a US resident, you will not be able to open an account with InstaForex anyway.

We are sorry for any inconvenience caused by this message.