EUR/JPY Price Forecast: Trades around 176.00 near nine-day EMA

EUR/JPY may find immediate support at the 12-month low of 175.10.
The 14-day Relative Strength Index near 35 reflects weak momentum.
The primary barrier lies at the nine-day EMA of 176.32.

EUR/JPY inches lower after registering modest gains in the previous day, trading around 175.90 during Asian hours on Thursday. Based on the technical analysis of the daily chart's descending channel pattern, the currency cross maintains a clear bearish bias.

The EUR/JPY cross is maintaining a bearish near-term bias as it holds below both the nine- and 50-day Exponential Moving Averages (EMAs). The short-term EMA sits under the longer one, reinforcing a downside tone, while the 14-day Relative Strength Index (RSI) around 35 suggests weak momentum that is approaching, but not yet in, oversold territory.

TMGM талдауы: Қаржы нарығы жаңалықтары, экономикалық күнтізбе және нарықтық шолулар

The EUR/JPY cross may fall toward the 12-month low of 175.10, reached on October 23, followed by the lower boundary of its descending channel around 174.60. Further declines below this confluence support zone would open the door for the currency cross to navigate the region around the 15-month low at 169.72.

On the upside, the primary barrier lies at the nine-day EMA of 176.32, followed by the upper boundary of the descending channel near 178.20. Further resistance lies at the 50-day EMA of 178.99. A successful break above the medium-term price average would cause a bullish reversal, supporting the EUR/JPY cross to explore the area around the all-time high of 187.95, reached on April 17.

Chart Analysis EUR/JPY — EUR/JPY: Daily Chart

Yen climbs up G10 rankings as intervention underpins gains

Strategists at Rabobank highlight the improving performance of the Yen within the G10 complex, noting that "the JPY is the second best performing G10 currency in the half year to date after the NOK" and "the fourth best performing G10 currency in the year to date." They caution, however, that this resilience has not been entirely organic, stressing that "significant amounts of FX intervention in favour of the JPY have been a notable factor in supporting it this year."

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

Japanese Yen FAQs

What key factors drive the Japanese Yen?

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.

How do the decisions of the Bank of Japan impact the Japanese Yen?

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.

How does the differential between Japanese and US bond yields impact the Japanese 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.

How does broader risk sentiment impact the Japanese Yen?

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.

Келесі мақала