EUR/JPY Price Forecast: Will bearish signals keep the pair under pressure as it falls towards 175.50?

• Selling pressure takes EUR/JPY towards 175.65 in early European trade on Wednesday.
• Bearish RSI momentum reinforces the cross’s negative bias below the 100-day SMA.
• While 175.45 offers immediate support, the first resistance level stands at 176.43.

Pressure on EUR/JPY persists in Wednesday’s early European session, with the cross trading lower around 175.65. Concerns over possible currency intervention by Japanese authorities are supporting the Japanese Yen (JPY) against the Euro (EUR).

On Tuesday, Japanese Finance Minister Satsuki Katayama said the government was prepared to act decisively in the currency market. Officials would monitor market movements with greater urgency, including at the present moment, Katayama added.

For fresh direction, traders are looking to the European Central Bank (ECB) interest rate announcement later on Thursday. The focus will then turn to Friday’s Bank of Japan (BoC) policy meeting.

Having increased 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 continue to fuel strong expectations of rate increases at later meetings.

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

Could BoJ caution keep the Yen under pressure as intervention remains some way off?

Official intervention is not yet an immediate prospect, according to analysts at MUFG/BTMU, 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 near-term outlook, 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.”

Although MUFG/BTMU expect the BoJ to recognise the need for additional tightening, they warn that its communication 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.”

Can Himino’s focus on AI capex and inflation risks support a stronger Yen?

A score of 8.2 on FXS Speechtracker places BoJ’s Himino exactly at the speaker’s historical average. However, the focus on increasing underlying inflation and inflation expectations gives the remarks a hawkish bias. Strong AI-led capital expenditure, resilient exports, accommodative financial conditions and rapidly growing bank lending feature in the remarks, highlighting still-low real rates and increasingly prominent upside risks to prices.

By warning that delayed policy adjustments could create inflation risks and harm the economy, the remarks indicate a greater willingness to tighten policy to ensure price stability. In currency markets, underlying inflation close to target, alongside heightened upside price risks, strengthens expectations of further policy normalisation. This is supportive of the Yen, particularly against low-yielding currencies.

Technical Analysis: Can EUR/JPY shake off its bearish bias below the 100-day SMA?

A bearish near-term picture remains evident on the EUR/JPY daily chart, with spot trading well below the 100-day Moving Average (MA) and the Bollinger Bands’ 20-day simple moving average. Just above support at the lower Bollinger Band, the price remains under pressure. Meanwhile, the Relative Strength Index (14), at 32.67, is approaching oversold territory, suggesting that the decline is already stretched even as downside pressure prevails.

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

An advance would first encounter resistance at the 26 October high of 176.43, followed by the middle Bollinger Band around 177.00 and  the upper Bollinger Band near 178.50. Sustained buying beyond that level could open the way towards the psychological mark of 180.00 and the 100-day MA at 182.20. 

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