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

Immediate support for EUR/JPY could emerge at 175.10, its 12-month low.
Momentum remains weak, with the 14-day Relative Strength Index close to 35.
At 176.32, the nine-day EMA presents the first hurdle.

Bearish pressure persists in EUR/JPY, which is edging down to around 175.90 in Thursday’s Asian session after posting modest gains the previous day. A descending channel on the daily chart points to a firmly negative technical outlook for the cross.

Trading below both the nine- and 50-day Exponential Moving Averages (EMAs) keeps the near-term outlook for EUR/JPY bearish. With the shorter-term EMA below its longer-term counterpart, the alignment reinforces the downside bias. Meanwhile, a reading of around 35 on the 14-day Relative Strength Index (RSI) signals subdued momentum, approaching oversold territory without having entered it.

TMGM Analysis: Financial Market News, Economic Calendar & Market Insights

A move lower in EUR/JPY could bring the 12-month trough of 175.10, recorded on 23 October, into focus before the descending channel’s lower edge at around 174.60. A break beneath this support confluence would leave the cross exposed to the region of 169.72, its 15-month low.

Any recovery would first face the nine-day EMA at 176.32, with the channel’s upper boundary near 178.20 providing the next hurdle. Beyond that, the 50-day EMA at 178.99 offers further resistance. Clearing this medium-term moving average would trigger a bullish reversal and support a move in EUR/JPY towards the area of its all-time peak of 187.95, recorded on 17 April.

Chart Analysis EUR/JPY — EUR/JPY: What Does the Daily Chart Signal?

How Is Intervention Helping the Yen Rise Through the G10 Rankings?

The Yen’s stronger showing among G10 currencies is highlighted by strategists at Rabobank, who note 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." However, they warn that this strength has not been entirely organic, emphasising 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: Frequently Asked Questions

Which Major Factors Influence the Japanese Yen?

Among the most actively traded currencies globally, the Japanese Yen (JPY) draws its value broadly from Japan’s economic performance. More specific influences include the Bank of Japan’s policy, the gap between Japanese and US bond yields, and traders’ appetite for risk, alongside other factors.

Why Do Bank of Japan Decisions Matter for the Japanese Yen?

Currency control forms part of the Bank of Japan’s mandate, making its actions important for the Yen. At times, the BoJ has intervened directly in the foreign exchange market, usually to weaken the currency. Political concerns among Japan’s main trading partners, however, discourage frequent intervention. Between 2013 and 2024, the BoJ’s ultra-loose monetary policy weakened the Yen against its major peers as the policy gap between the Bank of Japan and other leading central banks widened. More recently, a gradual withdrawal of that ultra-loose stance has provided some support to the Yen.

Why Does the Gap Between Japanese and US Bond Yields Matter for the Yen?

By maintaining ultra-loose monetary policy over the past decade, the BoJ allowed its stance to diverge increasingly from those of other central banks, particularly the US Federal Reserve. The resulting widening in the yield gap between 10-year US and Japanese bonds supported the US Dollar against the Japanese Yen. That gap is now narrowing following the BoJ’s 2024 decision to move gradually away from ultra-loose policy, alongside interest-rate cuts by other major central banks.

Why Does Wider Market Risk Sentiment Affect the Japanese Yen?

Investors often regard the Japanese Yen as a safe-haven asset, favouring it during periods of market stress for its perceived reliability and stability. As a result, turbulent market conditions are likely to lift the Yen against currencies viewed as riskier investments.