EUR/JPY traded near 182.50 on Monday, down 0.15%, as markets waited for Eurozone inflation data and policy signals from Japan. Traders stayed cautious ahead of key releases due on Wednesday. Germany’s IFO Business Climate Index rose to 88.6 in February, above the 88.4 expected, and up from 87.6 in January. The Current Assessment Index increased to 86.7 from 85.7, while the Expectations Index came in at 90.5, matching forecasts.

Eurozone Inflation And Growth In Focus

Focus now shifts to Eurozone core HICP inflation. It is expected to come in at 2.2% year on year in January, down from 2.3% in December. Headline HICP is seen steady at 1.7%. Germany’s fourth-quarter GDP is also due on Wednesday. In Japan, National CPI rose 1.5% year on year in January, down from 2.1% in December, and core measures also cooled. Markets priced the chance of a BoJ rate rise at the 28 April meeting at about 70%. EUR/JPY remains closely tied to interest-rate expectations in both regions. Softer Eurozone inflation could pressure the Euro, while clearer signs of a BoJ hike could support the Yen. This is a key moment for EUR/JPY. The next few weeks may be driven by different central bank paths. The events to watch are the Eurozone inflation report and any BoJ guidance ahead of the April meeting. This policy gap could create an opportunity for traders looking for a possible move lower in the pair.

Trade Setups And Options Positioning

Markets expect Eurozone inflation to ease. That would support the European Central Bank’s current “wait-and-see” stance on rates. After the rate cuts seen from the ECB through 2025, inflation staying below 2% would back a more dovish view. That may make the Euro less appealing, especially against a currency where the central bank may be moving toward tighter policy. At the same time, the Yen is supported by the strong chance of a BoJ rate hike in April. In March 2024, the BoJ ended its negative interest-rate policy, and markets have been watching for the next step since then. Japan’s Ministry of Finance data showed foreign investors turned into net buyers of Japanese government bonds in late 2025, which has also helped support the Yen. With that backdrop, one straightforward strategy is to buy EUR/JPY put options. This lets traders position for a decline while limiting risk to the premium paid. It may make sense to consider expirations after the late-April BoJ meeting to capture possible volatility around that event. For a lower-cost alternative, bear put spreads may be suitable. This involves buying a put at a higher strike and selling a put at a lower strike. Doing so reduces the upfront cost. This approach fits traders who expect a moderate drop in EUR/JPY rather than a sharp selloff. Implied volatility on EUR/JPY options is likely to be higher ahead of these releases, which makes option premiums more expensive. This reflects uncertainty and the risk of larger price swings after the inflation data and central bank signals. Traders should account for these higher costs when placing new positions. Create your live VT Markets account and start trading now.

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