The EUR/JPY pair remains under pressure for the fourth consecutive day on Friday, trading around 155.30 during the Asian session. The Japanese Yen (JPY) continues to strengthen against the Euro (EUR) following hawkish signals from the Bank of Japan (BoJ) and escalating global trade tensions.
BoJ Hawkish Stance Lifts Yen
BoJ Deputy Governor Shinichi Uchida reiterated that Japan’s underlying inflation is gradually rising toward the central bank’s 2% target, reinforcing expectations of a rate hike later this year. His comments outweighed the impact of the softer-than-expected Tokyo Consumer Price Index (CPI) data, which showed inflation slowing in February.
- Tokyo CPI rose 2.9% YoY in February, down from 3.4% in January.
- Core CPI (excluding fresh food and energy) increased by 2.2% YoY, below January’s 2.5% reading.
- Tokyo CPI ex Fresh Food rose 2.2% YoY, missing the forecast of 2.3%.
- Despite the softer inflation print, Uchida’s hawkish tone suggests the BoJ could exit negative interest rates this year, boosting the Yen’s appeal.
Trade Tensions Pressure Euro
The Euro faces renewed downside pressure amid escalating US-EU trade tensions. US President Donald Trump threatened to impose 25% tariffs on Eurozone cars and other products as early as April, sparking fears of a trade war between the US and Europe. The European Commission (EC) vowed to retaliate firmly against any unjustified trade barriers, adding to market uncertainty.
The fragile Eurozone economy, already struggling with weak demand, remains vulnerable to external shocks, further weighing on the Euro.
Technical Outlook
EUR/JPY maintains a bearish bias, trading below key moving averages on the daily chart. The pair is testing support near 155.00, with a break below this level potentially opening the door toward 154.20 and 153.50.
On the upside, immediate resistance is seen at 156.00 (nine-day EMA), followed by 157.20. A decisive break above these levels would ease the bearish pressure, but the broader outlook remains tilted to the downside.
Market Focus
Investors will closely monitor the US PCE inflation data and any fresh updates on global trade developments. The Yen’s safe-haven appeal could continue to support the currency amid ongoing geopolitical uncertainties.
Related Topics:
