EUR/JPY is trading around 184.70, showing little change due to mixed signals from the Eurozone and Japan. The European Central Bank (ECB) has kept its policy rate at 2.0% since June, with no immediate changes expected. They foresee inflation staying below 2% until 2028. European officials are cautiously optimistic about economic growth, predicting inflation will remain close to the 2% target. In Japan, the Yen is gaining strength as a safe-haven asset amidst global tensions and fiscal issues. Comments from Japan’s Vice Finance Minister suggest potential market interventions might be on the horizon.

Bank Of Japan And Policy Rates

The Bank of Japan (BoJ) recently raised its policy rate to 0.75%, signaling possible future increases without a set timeline. BoJ Governor Kazuo Ueda states decisions will depend on economic and financial conditions, with potential rate hikes expected by 2026. The stability of EUR/JPY is due to the ECB’s steady policies limiting Euro growth, while the Yen appreciates from Japan’s cautious approach towards rate hikes and uncertain global conditions. The Euro has gained 0.22% against the US Dollar, with percentage changes against other major currencies noted. The heat map displays currency percentage changes, listing the base currency on the left and the quote on top. Currently, EUR/JPY is fluctuating within a tight range around 184.70 as the year ends. The ECB’s stable policy helps keep the Euro steady, while the BoJ’s gradual move toward higher rates supports the Yen. This indicates low volatility in the coming weeks, reducing the chances of drastic price shifts.

Strategy For The Weeks Ahead

With this outlook, selling options for premium income seems to be a smart strategy. Traders might explore range-bound positions, such as short strangles or iron condors, which perform well when the currency pair remains stable. These strategies aim to benefit from time passage, known as theta decay, in a market without clear catalysts. Recent data shows that EUR/JPY’s one-month implied volatility has dropped to 6.1%, the lowest level in over a year. Eurostat’s flash estimate for November 2025 indicates Eurozone inflation at a mild 1.9%, giving the ECB no reason to change its current stance. This data reinforces why the pair lacks momentum right now. Reflecting back, the strong EUR/JPY trend from 2022 to 2024 was driven by a significant policy gap that is now mostly closed. The main risk to a range-trading strategy would be an unexpected geopolitical event or stronger statements from Japan’s Ministry of Finance, which could sharply increase volatility. Therefore, managing risk carefully is essential for any volatility-selling position. Create your live VT Markets account and start trading now.

here to set up a live account on VT Markets now