EUR/JPY rose to around 182.90 in early European trading on Thursday. The move came as markets priced in the ECB keeping its benchmark rate at 2.0% for the rest of this year, with possible increases next year.
Japan’s National CPI is due on Friday. Annual inflation eased to 2.1% in December 2025, the lowest level since March 2022. A stronger CPI print could lift expectations for an earlier BoJ rate hike.
Technical Outlook On The Daily Chart
On the daily chart, EUR/JPY is still trading above the rising 100-day EMA, which keeps the medium-term trend positive. The RSI is at 47.83 and would signal improving momentum if it moves above 50.
Bollinger Bands are tightening, which points to lower volatility. Price is below the midline but above the lower band. Resistance sits at 183.35 and support is at 180.75. A daily close above 183.35 could open the way to 186.00, while a break below 180.75 may expose 180.68.
The Yen is driven by Japan’s economic performance, BoJ policy, yield spreads versus US bonds, and overall risk sentiment. The BoJ has intervened in markets at times. Ultra-loose policy from 2013 to 2024 weakened the Yen, while a gradual policy unwind since 2024 has offered some support.
With EUR/JPY near 182.90, our near-term focus is the gap between central bank expectations. The market is pricing an ECB rate of 2.0% through the year, which supports the Euro. That view was reinforced last week when Eurozone HICP inflation for January came in a touch sticky at 2.4%, which reduced hopes for early rate cuts.
The main event risk is Japan’s National CPI report, due tomorrow. After inflation cooled to 2.1% in December 2025, consensus expects a small rebound to 2.2% for January. A much higher reading would likely fuel talk that the Bank of Japan could speed up policy normalization. That would support the Yen and could push this pair lower.
Options Strategy Considerations
For a bullish setup, consider buying call options with strikes above the 183.35 resistance level, such as 183.50 or 184.00. If Japanese CPI is soft and price breaks above this barrier, these calls would provide leveraged exposure to a potential move toward the 186.00 target. Today’s low volatility (shown by tighter Bollinger Bands) also makes these options relatively cheaper.
To hedge against, or potentially profit from, an upside surprise in Japanese inflation, consider buying put options. Our trigger would be a break below the key 100-day EMA at 180.75, so puts with a strike around 180.50 could fit. In 2024 and 2025, the JPY often rallied sharply when the BoJ even hinted at tightening, so it is important to plan for downside risk.
Because tomorrow’s release could drive a large move, a volatility strategy may also make sense. One approach is a long straddle: buy both a call and a put with the same strike price and expiration. This benefits from a big move in either direction and can work well when volatility is low ahead of a major catalyst.
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