EUR/JPY is trading at around 182.40 on Thursday, showing no change for the day. This stability is due to a balance between Europe’s stabilizing economy and rising expectations for tighter monetary policy in Japan. In Europe, ECB President Christine Lagarde stated that the current policy is adequate for steering inflation toward targets. There may be upward revisions to growth forecasts, which could signal the end of the easing phase.

Eurozone Monetary Policy

Policymakers like Francois Villeroy de Galhau are in agreement about keeping current rates. The lack of major economic news from the Eurozone prevents immediate triggers for the Euro. On the other hand, the Japanese Yen is gaining support as investors anticipate a rate hike from the Bank of Japan (BoJ). BoJ Governor Kazuo Ueda mentioned progress towards policy goals, indicating a gradual normalization process. The Corporate Goods Price Index indicates persistent inflation among businesses, strengthening the argument for more tightening. However, concerns remain about Japan’s fiscal policy due to increased spending under Prime Minister Sanae Takaichi. Traders are waiting for the BoJ’s policy decision next Friday, and the markets expect a potential rate increase soon. Today, the Euro is gaining against the Australian Dollar.

Currency Market Analysis

A heat map displays changes among major currencies. You can choose a base currency and a quote currency to see their percentage changes. Ghiles Guezout, a Market Analyst, employs both fundamental and technical analysis to uncover market opportunities. With EUR/JPY hovering around the 182.40 mark, there’s limited momentum in either direction. The European Central Bank has clearly indicated the end of its easing cycle, establishing a strong support level for the Euro. This suggests that selling short-dated options for premium could be a strategic approach in the days leading up to the BoJ’s decision next week. The key event risk lies in the BoJ’s policy meeting next Friday, which could lead to heightened volatility. With over a 60% chance of a rate hike priced in, this could strengthen the Yen. Traders might consider buying volatility through strategies like straddles or strangles that expire after the announcement. This would allow potential profits from significant price swings in either direction, whether the BoJ raises rates as expected or surprises with a dovish stance. On the European front, the ECB’s position is supported by recent data showing Eurozone core inflation steady at 2.3% in November 2025. This reinforces their decision to hold rates steady. The Euro’s underlying strength might limit downward movement for EUR/JPY, even if the BoJ tightens. Therefore, any dip below 180.00 could attract buying interest, highlighting it as a key level to watch. Additionally, Japan’s Corporate Goods Price Index for November 2025 rose by 2.1% year-over-year, further supporting the case for monetary normalization. Looking back, the pair’s rise from below 170 earlier this year was fueled by significant policy differences. Now that these gaps are closing, the likelihood of a trend reversal or a prolonged consolidation period has increased. Create your live VT Markets account and start trading now.

here to set up a live account on VT Markets now