Key Moments
- EUR/JPY trades near 184.80 on Tuesday, down 0.50% as the stronger Japanese Yen weighs on the pair.
- ECB President Christine Lagarde’s latest comments back expectations for steady Eurozone interest rates.
- The Japanese Yen stays supported after Prime Minister Sanae Takaichi’s election win and renewed official warnings against speculative moves.
EUR/JPY Under Pressure as Yen Strengthens
EUR/JPY is trading lower on Tuesday, with the cross hovering around 184.80 at the time of writing, a decline of 0.50% on the day. Persistent demand for the Japanese Yen (JPY) is weighing on the pair, even as Japan faces the prospect of a more expansionary political backdrop.
ECB Tone Signals Extended Rate Stability
In the Eurozone, the Euro (EUR) is struggling to gain traction following the latest communication from European Central Bank (ECB) President Christine Lagarde. She reiterated her confidence that inflation will sustainably return to the 2% target over the medium term, in line with last week’s monetary policy statement. This reinforces market expectations that interest rates will remain unchanged for an extended period in the coming months, limiting potential support for the single currency.
Japanese Political Outcome Supports Yen
On the Japanese side, the decisive election victory of Prime Minister Sanae Takaichi over the weekend has not, at this stage, undermined the Yen. Although she is expected to maintain an accommodative fiscal stance, investors have taken comfort from her plan to fund tax cuts through alternative financing channels rather than by increasing public debt. This strategy has eased worries about fiscal deterioration and has helped underpin the Japanese currency.
Official Warnings Reinforce Yen’s Firm Tone
The Yen is also drawing strength from explicit verbal backing by Japanese authorities. Finance Minister Satsuki Katayama and the country’s top currency diplomat, Atsushi Mimura, cautioned on Monday that immediate action could be taken if there are excessive speculative moves against the Yen. These statements underscore heightened official vigilance and contribute to the Yen’s firm tone, keeping EUR/JPY on the defensive despite the absence of significant macroeconomic surprises.
Euro Performance Against Major Currencies
The table below shows today’s percentage changes of the Euro against key major currencies. Euro was the strongest against the Australian Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.18% | 0.15% | -0.43% | 0.10% | 0.37% | 0.25% | 0.00% | |
| EUR | -0.18% | -0.03% | -0.59% | -0.08% | 0.19% | 0.07% | -0.17% | |
| GBP | -0.15% | 0.03% | -0.59% | -0.05% | 0.22% | 0.10% | -0.14% | |
| JPY | 0.43% | 0.59% | 0.59% | 0.52% | 0.79% | 0.66% | 0.43% | |
| CAD | -0.10% | 0.08% | 0.05% | -0.52% | 0.26% | 0.14% | -0.08% | |
| AUD | -0.37% | -0.19% | -0.22% | -0.79% | -0.26% | -0.12% | -0.35% | |
| NZD | -0.25% | -0.07% | -0.10% | -0.66% | -0.14% | 0.12% | -0.23% | |
| CHF | -0.01% | 0.17% | 0.14% | -0.43% | 0.08% | 0.35% | 0.23% |
The heat map reflects the percentage changes of major currencies relative to each other. The base currency is taken from the left-hand column, and the quote currency from the top row. For instance, selecting the Euro as the base currency on the left and moving horizontally to the US Dollar column shows the percentage change for EUR (base)/USD (quote).
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