176.00 Area: EUR/JPY Trades Near Nine-Day EMA | Price Forecast

175.10, the 12-month low, may provide immediate support for EUR/JPY.
Near 35, the 14-day Relative Strength Index signals subdued momentum.
176.32, the nine-day EMA, marks the first resistance level.

EUR/JPY trades near 175.90. The cross edges lower in Thursday’s Asian session after posting a modest advance the previous day. A descending channel on the daily chart points to a clear bearish bias.

Trading below both its nine- and 50-day Exponential Moving Averages (EMAs), EUR/JPY retains a bearish near-term outlook. The shorter EMA remains beneath the longer-term average, reinforcing the negative tone. Meanwhile, a 14-day Relative Strength Index (RSI) reading around 35 indicates weak momentum approaching, but not yet reaching, oversold territory.

TMGM Analysis: Financial Market News, Economic Calendar & Market Insights

A potential decline could take EUR/JPY towards 175.10, the 12-month low recorded on 23 October, before bringing the descending channel’s lower boundary around 174.60 into view. A break below this support confluence would leave room for the cross to test the area around 169.72, its 15-month low.

Any recovery would first encounter the nine-day EMA at 176.32, ahead of the descending channel’s upper boundary near 178.20. Beyond that, the 50-day EMA at 178.99 offers further resistance. Clearing this medium-term moving average would trigger a bullish reversal, supporting a move towards the all-time high of 187.95 recorded on 17 April.

Chart Analysis EUR/JPY — EUR/JPY: Daily Technical Chart

G10 Rankings: Intervention Supports Yen’s Advance

The Yen’s stronger showing among G10 currencies has drawn attention from Rabobank strategists. They note that "the JPY is the second best performing G10 currency in the half year to date after the NOK" and "the fourth best performing G10 currency in the year to date." However, they warn that these gains are not entirely organic, emphasising that "significant amounts of FX intervention in favour of the JPY have been a notable factor in supporting it this year."

(The technical analysis of this story was written with the help of an AI tool. Learn more.)

Japanese Yen: Key Questions

Japanese Yen: Main Drivers

Among the world’s most actively traded currencies, the Japanese Yen (JPY) broadly reflects the performance of Japan’s economy. More specific influences include Bank of Japan policy, the gap between Japanese and US bond yields, and traders’ appetite for risk, alongside other factors.

Bank of Japan Decisions: Implications for the Yen

Currency control forms part of the Bank of Japan’s mandate, making its actions a key influence on the Yen. At times, the BoJ has intervened directly in foreign exchange markets, usually to weaken the currency. Political concerns among Japan’s main trading partners nevertheless discourage frequent intervention. Between 2013 and 2024, the BoJ’s ultra-loose monetary policy weakened the Yen against its major peers as the policy gap with other leading central banks widened. More recently, a gradual withdrawal of that ultra-loose stance has provided some support for the currency.

Japanese and US Bond Yields: Effects on the Yen

By maintaining ultra-loose monetary policy over the past decade, the BoJ moved further apart from other central banks, notably the US Federal Reserve. The resulting widening of the spread between 10-year US and Japanese bond yields favoured the US Dollar over the Japanese Yen. That gap is now narrowing as the BoJ’s 2024 decision to phase out ultra-loose policy combines with interest-rate cuts by other major central banks.

Risk Sentiment: The Yen’s Safe-Haven Role

Investors often regard the Japanese Yen as a safe-haven asset. During periods of market stress, its perceived reliability and stability make investors more inclined to allocate funds to the currency. Such turbulence is therefore likely to lift the Yen against currencies considered riskier investments.