175.50 Area: EUR/JPY Slips as Bearish Signals Strengthen Downside Bias | Price Forecast

• 175.65 is the level EUR/JPY eases towards in early European trading on Wednesday.
• Below the 100-day SMA, the cross retains a bearish bias as RSI momentum remains negative.
• 175.45 marks initial support, while 176.43 presents the first resistance level.

175.65 is where EUR/JPY trades in negative territory early in Wednesday’s European session. Concerns over currency intervention by Japanese authorities are lifting the Japanese Yen (JPY) against the Euro (EUR).

Readiness to take decisive action in the currency market was reaffirmed on Tuesday by Japanese Finance Minister Satsuki Katayama. Officials would monitor market movements with heightened urgency, including at the present moment, she added.

Thursday’s European Central Bank (ECB) interest rate decision is the next potential catalyst for traders. Focus then turns to Friday’s Bank of Japan (BoC) policy meeting.

After increasing its three key policy rates by 25 basis points (bps) in September, the ECB is likely to leave them unchanged when it announces its interest rate decision on Thursday. Elevated oil prices and inflation risks nevertheless keep expectations of further rate increases at subsequent meetings high.

1.25% is the policy rate the BoJ is expected to retain when its two-day meeting concludes on Friday. Reuters reports indicate that, at this meeting, the Japanese central bank is anticipated to announce that its 2% “underlying inflation” target has been achieved.

160-level in focus as BoJ caution leaves Yen exposed before intervention

Official intervention is not yet imminent, in the view of MUFG/BTMU analysts, who note that “we are likely still some distance from that with the 160-level the obvious point in which those threats could turn into action.” On the Yen’s near-term prospects, they add that “the yen may well struggle through this week with investors likely anticipating BoJ Governor Ueda being more cautious in his words on Friday given the global backdrop.”

Acknowledgement that further tightening is needed is expected from the BoJ by MUFG/BTMU, although they warn that its message may disappoint market expectations: “the BoJ will be mindful of that and while we expect the BoJ to signal more rate hikes are necessary, Ueda’s style of communication suggests he may not provide a strong message on a move in December that remains 80% priced.”

8.2 Speechtracker score: BoJ’s Himino highlights AI capex and inflation risks, supporting Yen

8.2 is BoJ’s Himino’s FXS Speechtracker score, matching the speaker’s historical average exactly. Even so, the focus on increasing underlying inflation and inflation expectations gives the remarks a hawkish tilt. Strong AI-led capital expenditure, resilient exports, accommodative financial conditions and rapid growth in bank lending feature in the comments. Together, they highlight still-low real interest rates and increasingly prominent upside price risks.

Greater readiness to tighten policy to secure price stability is signalled by the warning that delaying policy adjustments could create inflation risks and harm the economy. In currency markets, underlying inflation close to target, alongside elevated upside price risks, reinforces expectations of further normalisation. That combination favours the Yen, particularly against low-yielding currencies.

EUR/JPY Technical Analysis: 100-day SMA caps a bearish outlook

32.67 is the daily Relative Strength Index (14) reading for EUR/JPY, close to oversold territory. The cross retains a bearish near-term bias, trading well below its 100-day Moving Average (MA) and the Bollinger Bands’ 20-day simple moving average. With the price just above support at the lower Bollinger Band, the RSI suggests that the sell-off is already stretched despite prevailing downside pressure.

175.45, the lower Bollinger Band, provides the first significant downside support. A decisive move below it would bring the 23 October low of 175.10 into view, ahead of the 6 October 2025 low of 174.74.

176.43, the 26 October high, is the first upside hurdle. Beyond it lie the middle Bollinger Band at around 177.00 and  the upper Bollinger Band near 178.50. Sustained buying above that level could open a path towards the psychological 180.00 mark, followed by the 100-day MA at 182.20. 

(The technical analysis of this story was written with the help of an AI tool. Know more.)