Euro Gains vs Yen as Traders Watch Policy, Technical Levels

Key Moments

Price Action and Policy Backdrop

EUR/JPY is trading slightly higher near 184.90 during early European hours on Tuesday, extending gains as the cross holds in positive territory. The move comes as the Japanese Yen (JPY) softens against the Euro (EUR) following reports that Japanese authorities currently have no immediate intention to adjust the asset allocation of their state pension funds, which has dampened expectations for near-term backing for domestic markets.

Japan’s Finance Minister Satsuki Katayama stated on Tuesday that the government may consider altering pension asset allocations if conditions change. Market participants remain attentive to the risk of potential intervention by Japanese officials.

Technical Overview

On the daily chart, EUR/JPY is trading above the 100-day Simple Moving Average (SMA) and the 20-period middle line of the Bollinger Bands. These indicators collectively support a modestly constructive outlook for the pair. Price also remains comfortably above the lower Bollinger Band, while the upper band, positioned at 185.89, is acting as a nearby ceiling.

The Relative Strength Index (RSI) is at 49.62, close to the neutral threshold, pointing to a consolidative setup with only a mild bullish inclination rather than a strong trend.

Key Technical Levels

Immediate resistance is aligned with the upper Bollinger Band around 185.90. A decisive move above this level would expose the June 17 high at 186.32, with further upside scope toward the April 29 high of 187.42.

On the downside, initial support is seen at the 100-day SMA located at 184.85, followed by the middle Bollinger Band at 184.75. The lower Bollinger Band at 183.65 forms a deeper area of structural support if selling pressure intensifies.