EUR/JPY moved above 182.00 on Monday as the Euro strengthened against a weaker Japanese Yen. The move followed softer Japanese GDP data. Markets were also waiting for the Eurozone Industrial Production report due later in the day. Eurozone Industrial Production is expected to drop 1.5% in December, after a 0.7% rise in November. The annual rate is forecast to slow to 1.2% from 2.5% in November.

Key Data Driving The Move

Japan’s preliminary Q4 GDP showed 0.1% growth quarter-on-quarter, below the 0.4% forecast. On an annualised basis, it rose 0.2%, well under the 1.6% consensus estimate. In the previous quarter, Japan’s economy shrank 0.7% and fell 2.6% year-on-year. The latest figures have increased doubts that the Bank of Japan will raise rates in March. On Monday, Prime Minister Takaichi met Bank of Japan Governor Ueda. Ueda said the talks focused on general economic and financial conditions, and that there was no request related to interest rates. A year ago, in February 2025, EUR/JPY also climbed above 182.00. That move was driven by a weaker-than-expected Japanese Q4 GDP report, which raised questions about a possible Bank of Japan rate hike. At the same time, markets were looking ahead to Eurozone industrial production data that was also expected to be weak.

Market Conditions And Trade Approach

Today’s backdrop is different for the Yen. Japan’s latest national Core CPI for January 2026, released last week, came in at 2.6%. Inflation has stayed above the Bank of Japan’s target for several months. This steady inflation is strengthening the view that policy normalization is a question of when, not if, which provides underlying support for the JPY. The Eurozone outlook remains weak, unlike the mood in early 2025. The flash manufacturing PMI for February 2026 came in at 46.1, staying in contraction and pointing to continued industrial strain. This keeps the European Central Bank cautious and limits how far the Euro can rise against other currencies. With this policy gap widening, traders may want to prepare for a possible decline in EUR/JPY. One approach is to buy put options with strikes below the current price to benefit from potential Yen strength and Euro weakness. A bear put spread could also help reduce the upfront premium while targeting a moderate move lower over the next few weeks. Implied volatility in this pair is also rising, up nearly 15% since the start of the year. This suggests markets expect larger swings ahead of upcoming central bank meetings. As a result, putting trades on sooner may help avoid higher option premiums later. Create your live VT Markets account and start trading now.

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