Euro Gains Against Yen as Traders Eye PMIs and ECB Signals

Key Moments

EUR/JPY trades near 185.30 on Monday, up 0.16% as markets position for Eurozone PMI data and ECB communication.
ECB official Pierre Wunsch flags the possibility of another rate hike as soon as next month, with the deposit rate at 2.25%.
The Japanese Yen stays under pressure despite intervention warnings and rising BoJ rate expectations, with focus shifting to upcoming Japan PMI data and BoJ minutes.

EUR/JPY Rises Ahead of Key Eurozone Data and Lagarde Remarks

EUR/JPY is trading around 185.30 on Monday, showing a gain of 0.16% as of the time of writing. The move comes as investors prepare for the release of the Eurozone’s preliminary HCOB Purchasing Managers Index (PMI) figures and monitor speeches by the President of the European Central Bank (ECB).

The European data calendar is set to be in focus on Tuesday when the first estimates of June PMIs are released, providing fresh indications of the region’s growth trajectory. Market participants are also watching closely for comments from ECB President Christine Lagarde on Monday for additional signals on the monetary policy outlook.

ECB Policy Outlook: Potential for Further Tightening

On the policy front, ECB policymaker and Governor of the National Bank of Belgium Pierre Wunsch stated on Friday that another interest rate hike could occur as early as next month if the central bank sees further evidence that inflation pressures are expanding beyond the energy sector.

The ECB’s deposit rate stands at 2.25%, and financial markets continue to factor in at least one more 25-basis-point increase in the period ahead.

Yen Under Pressure Despite Tokyo’s Warnings

In Japan, the Japanese Yen (JPY) remains weak even as authorities issue renewed warnings about potential intervention. Japan’s Finance Minister Satsuki Katayama reiterated on Monday that officials are prepared to act against excessive currency moves at any time, while declining to specify particular intervention levels.

The Yen is also being pressured by concerns linked to the economic fallout from the Middle East conflict and ongoing disruptions to energy flows through the Strait of Hormuz. Iran announced the closure of this strategic route after accusing the United States (US) and Israel of breaching a ceasefire, while US President Donald Trump warned of further military action against Iran if Hezbollah continues attacks on Israel.

BoJ Tightening Expectations Tempered by Geopolitical Risks

These geopolitical and energy-related developments are currently outweighing expectations for additional monetary tightening by the Bank of Japan (BoJ). Minutes from the BoJ’s April meeting revealed that some board members supported a faster pace of rate increases to avoid an inflation overshoot.

BoJ Deputy Governor Shinichi Himino reiterated that the central bank will keep adjusting interest rates in line with economic conditions, inflation dynamics, and financial market behavior.

Market attention now turns to Japan’s PMI readings due on Tuesday and the publication of the BoJ Summary of Opinions from its June meeting on Wednesday. That meeting resulted in a 25-basis-point rate increase, which lifted the policy rate to 1%, and the upcoming documents are expected to offer further insight into policymakers’ views on the economic outlook.

Euro Performance Against Major Currencies

The Euro’s moves in broader foreign exchange trading show relative strength against the Japanese Yen, according to the latest cross-currency performance data.

	USD	EUR	GBP	JPY	CAD	AUD	NZD	CHF
USD		0.13%	0.06%	0.27%	0.13%	0.13%	0.17%	0.03%
EUR	-0.13%		-0.08%	0.15%	-0.02%	0.04%	0.06%	-0.09%
GBP	-0.06%	0.08%		0.24%	0.08%	0.10%	0.12%	-0.01%
JPY	-0.27%	-0.15%	-0.24%		-0.15%	-0.14%	-0.11%	-0.22%
CAD	-0.13%	0.02%	-0.08%	0.15%		0.00%	0.02%	-0.07%
AUD	-0.13%	-0.04%	-0.10%	0.14%	0.00%		0.05%	-0.09%
NZD	-0.17%	-0.06%	-0.12%	0.11%	-0.02%	-0.05%		-0.12%
CHF	-0.03%	0.09%	0.00%	0.22%	0.07%	0.09%	0.12%

The table shows the percentage changes of the Euro (EUR) against the listed major currencies, with the Euro identified as strongest versus the Japanese Yen. In this matrix, the base currency is taken from the left-hand column and the quote currency from the top row. For example, selecting the Euro from the left column and moving across to the US Dollar cell provides the percentage change for EUR (base)/USD (quote).