EUR/JPY dips as Japanese Yen strengthens on intervention signals
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EUR/JPY corrects and trades around 183.90 on Tuesday at the time of writing, down by 0.30% on the day, after posting a record high near 184.92 earlier in the week. The pullback in the cross comes as the Japanese Yen (JPY) rebounds, supported by expectations of intervention from Japanese authorities in response to the rapid depreciation of the currency. Support for the Japanese Yen followed comments from Japan’s Finance Minister, Satsuki Katayama, who said the government has full freedom to act against excessive moves in the foreign exchange market and would take appropriate action if necessary. These remarks were enough to trigger profit-taking on EUR/JPY, even though many investors believe the impact of such warnings could be short-lived in the absence of stronger fundamental backing. Indeed, monetary policy remains a key source of vulnerability for the Japanese Yen. The Bank of Japan (BoJ) continues to strike a cautious tone on further monetary tightening after raising its policy rate by 25 basis points to 0.75%. Policymakers have provided no clear guidance on the timing of future rate hikes. Former Bank of Japan board member Makoto Sakurai said the next rate increase could come around the middle of next year, while warning that additional hikes may become more challenging thereafter, limiting the JPY’s appeal over the medium term. On the European side, the Euro (EUR) shows a steadier performance. Investors are still trying to gauge the direction of European Central Bank (ECB) monetary policy into 2026. Several officials have indicated that inflation is expected to remain close to the 2% target over the medium term, reducing the likelihood of near-term policy adjustments. At its latest meeting, the European Central Bank kept interest rates unchanged, with President Christine Lagarde stating that monetary policy is in a good place and that rates are likely…
Filed under: News - @ December 23, 2025 12:20 pm