CFD Trading Rate Euro vs Japanese Yen (EURJPY)

• EUR/JPY bounces from three-week low to 161.96, forming a 'hammer' pattern suggesting potential upside.
• Mixed technical indicators prompt caution, with the RSI nearing a bearish shift as the pair eyes the 162.04 Tenkan-Sen.
• Bears and bulls vie for control, with critical supports and resistances set around key psychological and technical marks.

On Thursday, the EUR/JPY registered a volatile session that saw the pair dive to a three-week low of 160.55. However, the losses were short-lived amidst the ECB’s hawkish hold, and the session finished with losses of 0.43%. As the Friday Asian session begins, the cross trades at 161.96, down 0.10%.

EUR/JPY Price Analysis: Technical outlook

The EUR/JPY formed a 230 pip ‘hammer,’ which indicates the pair is edged to the upside. However, mixed signals between price action and the Relative Strength Index (RSI) are closing to the 50-midline about to shift bearish, suggesting caution is warranted.

On the upside, the pair is capped by the Tenkan-Sen at 162.04, which, once cleared, could open the door to testing the March 7 high at 162.81, followed by the psychological 163.00 mark. Nevertheless, should bears keep the EUR/JPY from climbing above 162.00, the pair could extend its losses.

The first support would be the Senkou Span A at 161.67, followed by the Kijun-Sen at 161.31. Once surpassed, the 160.55 March 7 low emerges as the demand area, followed by 160.00.

EUR/JPY Price Action – Daily Chart

• EUR/JPY plummets to 161.00 as the ECB keeps lending rates unchanged at 4.5% as expected.
• The ECB has revised down inflation forecasts and near-term growth projections.
• Investors see the BoJ exiting dovish rate stance sooner.

The EUR/JPY pair witnesses an intense sell-off, falling to 161.00 in Thursday’s early New York session. The asset drops as the European Central Bank (ECB) has kept its Main Refinancing Operations Rate unchanged at 4.5% for the fourth time in a row.

Market participants widely anticipated the ECB's decision to maintain a steady interest rate. ECB policymakers have reiterated that the central bank will not shift to policy normalization until it is confident that inflation will sustainably fall below the 2% target.

Meanwhile, the ECB has also released growth forecasts for 2025 and 2026. The ECB staff expect the economy to pick up and to grow at 1.5% in 2025 and 1.6% in 2026, supported initially by consumption and later also by investment. The ECB has revised down growth rate projections to 0.6% for the current year. The ECB expects that near-term performance will be subdued.

Projections for core inflation that exclude volatile energy and food prices have also been revised down to 2.6% for 2024, 2.1% for 2025, and 2.0% for 2026.

Going forward, investors will focus on the monetary policy statement from ECB President Christine Lagarde. Market participants want to know when the ECB is expected to start reducing interest rates.

The major reason behind a sharp sell-off in the EUR/JPY pair is the sheer strength in the Japanese Yen on firm Bank of Japan (BoJ) rate hike bets. The expectations for the BoJ exiting the negative interest rates territory rose after BoJ board member Junko Nakagawa said “prospects for the economy to achieve a positive cycle of inflation and wages are in sight.”

With speculation building again about a BoJ hike, EUR/JPY should move lower, analysts at ING say.

Time for EUR/JPY to move lower

• EUR/JPY attracts some sellers near 161.80 in Thursday’s European early session. 
• BoJ’s Ueda said it’s possible to exit from its ultra-easy monetary policy while striving to achieve a 2% inflation target.
• The ECB is anticipated to maintain the rate steady at a record 4.0%.
• The ECB Interest Rate decision and press conference will be the highlights on Thursday. 

The EUR/JPY cross drops below the 162.00 psychological mark during the early European session on Thursday. Investors will closely monitor the European Central Bank (ECB) Interest Rate decision later in the day. The ECB is expected to hold its policy rate steady at a record 4.0%. After the March policy meeting, market players will shift their focus to the ECB press conference, which might offer some hints about inflation and the economic outlook. At press time, EUR/JPY is trading at 161.80, losing 0.62% on the day. 

On Thursday, Bank of Japan (BoJ) policymaker Junko Nakagawa said that the prospects of sustainably achieving a 2% inflation target are gradually heightening and the central bank will gather information to make monetary policy decisions despite risks and uncertainty. Additionally, BoJ Governor Kazuo Ueda stated that it is fully possible to seek an exit from stimulus while striving to achieve a 2% inflation target. That being said, the hawkish comments from the Japanese authorities provide some support to the Japanese Yen (JPY) and exert some selling pressure on the EUR/JPY cross. 

The ECB is unlikely to cut borrowing rates before its June meeting, given that crucial wage data will only be available in May. Furthermore, the policymakers would take a cautious approach and wait for more evidence of inflation data before considering changing the policy stance. Financial markets anticipate the ECB to wait until June for a first-rate cut of 25 basis points (bps). However, the number of rate cuts will depend on the incoming data.

The ECB Interest Rate decision and press conference will be in the spotlight on Thursday, and this event might trigger volatility in the market. On Friday, the Japanese Labor Cash Earnings, Gross Domestic Product Annualized (GDP) for Q4, and Current Account will be released. 

• EUR/JPY marks third consecutive day of losses, trading near 162.70 with eyes set on crucial 162.00 support level.
• Technical analysis shows potential for rebound towards 163.00 if it breaches the Tenkan-Sen level, with higher resistance in sight.
• Sellers aiming below 162.50 could see the pair targeting 162.00 support, with further downside risks to February lows.

The EUR/JPY drops for the third straight day as Thursday’s Asian session begins, following Wednesday’s losses of 0.07%. At the time of writing, the cross-pair trades at 162.70, down 0.05%.

EUR/JPY Price Analysis: Technical outlook

The EUR/JPY has printed a new two-day low at 162.21, but it failed to close below the March 4 swing low of 162.53, which could open the door to challenge the 162.00 figure. After bouncing off the weekly lows, the pair hovers around the Tenkan-Sen level at 162.70. A decisive breach could open the door to test the 163.00 mark, followed by the November 27 high at 163.72, followed by the 164.00 figure.

On the other hand, if sellers push the exchange rate below 162.50, they could drag the spot price toward 162.00. Once cleared, the next support would be the February 29 low of 161.68, followed by the Kijun-Sen at 160.90.

EUR/JPY Price Action – Daily Chart

• The EUR/JPY is trading around 162.76, recording a 0.31% loss in Tuesday's trading session.
• The daily chart reveals that buyers are consolidating the last session's gains.
• Hourly indicators hint at a possible shift in trend with sellers in charge, and indicators near oversold territory.

In Tuesday's session, the EUR/JPY pair is trading at 162.76, with 0.31% losses. With a larger influence by buyers compared to sellers, the broader perspective suggests a predominant bullish trend despite the day-to-day loss as the buyers seem to be taking a breather. 

On the daily chart, the Relative Strength Index (RSI) for the EUR/JPY pair is in positive territory, signaling the domination of buyers in the market but it points south. Concurrently, the Moving Average Convergence Divergence (MACD) indicates a growing selling momentum with rising red bars which corroborates the idea of a short-term downward consolidation.

EUR/JPY daily chart

Comparatively, The hourly RSI value is indicating a negative territory, with sellers dominating the market but near the 30 threshold which could suggest that for the rest of the session, the pair may continue consolidating. The hourly MACD histogram shows flat red bars, which indicates negative momentum.

EUR/JPY hourly chart

Despite the short-term negative outlook, the EUR/JPY pair is trading above its 20,100,200-day Simple Moving Averages, indicating that the long-term trend remains bullish. The negative signals from the RSI and MACD however, are that for the short term, the sellers are in charge, but to challenge the clear overall bullish trend, they need to at least conquer the 20-day SMA.

• EUR/JPY loses momentum around 163.22 following the rise in Japanese CPI inflation data. 
• The Tokyo CPI climbed 2.6% YoY in February vs. 1.6% prior. 
• The ECB is anticipated to hold the rate steady at 4.5% at its March meeting on Thursday.

The EUR/JPY cross loses ground below the mid-163.00s during the early European trading hours on Tuesday. The rise in the Tokyo Consumer Price Index (CPI) for February triggered speculation that the Bank of Japan (BoJ) will exit the negative interest rate regime in the coming month, which lifts the Japanese Yen (JPY) and weighs on the cross lower. EUR/USD currently trades near 163.22, down 0.10% on the day. 

Data released from the Statistics Bureau of Japan on Tuesday revealed that the Tokyo CPI climbed 2.6% YoY in February from 1.6% in January. Additionally, the CPI ex Fresh Food and Energy eased to 3.1% YoY in January from the previous reading of 3.3%. The rise in price growth above the central bank’s target in February supported the case for the BoJ’s first interest rate hike since 2007. This, in turn, boosts the JPY against its rivals. 

The BoJ board member Hajime Takata hinted at a potential early move by the central bank to abandon its negative interest rate. He stated that the price aim was now within reach and it would be appropriate to change the monetary policy stance. Nonetheless, BoJ Governor Kazuo Ueda delivered a cautious view, saying that he would evaluate more data in order to confirm that a virtuous wage-price cycle is emerging.

On the Euro front, the European Central Bank (ECB) is expected to keep the main refinancing rate steady at 4.5% at its March meeting on Thursday. ECB President Christine Lagarde said last week that disinflation would persist but the central bank needs more evidence data before lowering the interest rate. Investors will take more cues from the press conference. A less hawkish tone could exert some selling pressure on the Euro (EUR) and create a headwind for the EUR/JPY cross. 

Later on Tuesday, the HCOB PMI data from Spain, Italy, France, Germany, and the Eurozone will be due. The Eurozone Retail Sales will be released on Wednesday. Market players will closely monitor the ECB rate decision on Thursday. These events could give a clear direction to the EUR/JPY cross. 

• EUR/JPY extends the rally near 163.15 amid the risk-on mood in Monday’s early European session. 
• Kyodo News agency reported Japanese government is considering announcing an end to deflation, raising the possibility of policy tightening.
• ECB is expected to leave the interest rate unchanged at its March meeting on Thursday. 
• Japan’s February Consumer Price Index (CPI) on Tuesday will be a closely watched event ahead of the ECB rate decision. 

The EUR/JPY cross holds above the 163.00 mark during the early European session on Monday. The risk-on environment in the market provides some support to the Euro (EUR) and creates a tailwind for the EUR/JPY cross. Nonetheless, the possibility that the Bank of Japan (BoJ) will shift its monetary policy stance might cap further losses of the Japanese Yen (JPY). At press time, EUR/JPY is trading at 163.15, gaining 0.26% on the day. 

A growing speculation that the BOJ will change its monetary policy path, which might lift the Japanese Yen (JPY). The BoJ policymaker Hajime Takata signaled the exit of its ultra-loose monetary policy as the central bank is on the path of achieving the 2% inflation target. Furthermore, the Japanese government is considering announcing an end to deflation, according to the Kyodo News agency. This flagged the heightened risks of policy tightening.

On the Euro front, the European Central Bank (ECB) is expected to maintain the interest rate steady at its March meeting on Thursday, as ECB policymakers want to see additional evidence that recent falls in inflation will be sustained. According to the minutes of the ECB in January, the policymakers highlighted that continuity, caution, and patience were still needed. Additionally, the ongoing geopolitical tensions in the Middle East might raise the fear that inflation could rebound, which could delay the speculation about rate cuts from the ECB. 

Market players will keep an eye on the Japanese Consumer Price Index (CPI) for February, due on Tuesday. The Eurozone Retail Sales will be released on Wednesday. The attention will shift to the ECB interest rate decision on Thursday as well as the ECB Press Conference. Traders will take cues from the data and find trading opportunities around the EUR/JPY cross. 

• EUR/JPY could meet the psychological resistance at the 163.00 level following February’s high at 163.72.
• EUR/JPY cross could find immediate support at the major level of 162.50.
• 14-day RSI indicates a bullish sentiment for the cross.

EUR/JPY retraces its recent losses, trading higher around 162.70 during the Asian session on Friday, following the psychological barrier of 163.00 level. A breakthrough above this barrier could lead the cross to explore the further resistance zone around the major level of 163.50 followed by February’s high at 163.72.

Technical analysis indicates a bullish sentiment for the EUR/JPY cross. The 14-day Relative Strength Index (RSI) is positioned above the 50 mark, signaling strength in the upward momentum.

However, the Moving Average Convergence Divergence (MACD) line is aligned with the signal line, indicating a convergence, while remaining above the centerline. Although the MACD is a lagging indicator, this configuration suggests a subdued momentum for the EUR/JPY cross at the moment.

On the downside, the EUR/JPY cross may encounter immediate support at the major level of 162.50, followed by the psychological level of 162.00. A breach below this support level could exert downward pressure on the pair, potentially testing the 21-day Exponential Moving Average (EMA) at 161.86.

Additionally, a further support zone for the EUR/JPY cross is anticipated around the major level of 161.50, with another significant support level near the 23.6% Fibonacci retracement level at 161.23.

EUR/JPY: Daily Chart

• EUR/JPY falls 0.80% to 162.00, reacting to BoJ's hawkish comments and soft EU inflation data.
• Technical analysis indicates crucial support and resistance levels, highlighting immediate market sensitivities.
• Further decline eyed with key supports at 161.75 and 161.00, unless buyers reclaim higher resistance points.

The EUR/JPY snaps two days of gains and drops on Thursday, following hawkish remarks by a Bank of Japan (BoJ) official. That and soft inflation data from countries in the Eurozone (EU) area are driving the cross-pair price action ahead of the Wall Street close. At the time of writing, the pair exchanged hands at 162.00, down 0.80%.

EUR/JPY Price Analysis: Technical outlook

The pair fell below 162.59, the Tenkan-Sen level, and slumped below the 162.00 figure, hitting a daily low of 161.68. However, the EUR/JPY recovered and reclaimed 162.00, though downside risks remain. If sellers achieve a daily close below 162.00, further weakness lies ahead. The next support would be the Senkou Span A at 161.75, followed by the 161.00 mark, and the Kijun Sen at 160.90.

Conversely, if buyers stepped in, stir resistance lies at 164.00, but firstly, they need to conquer the Tenkan-Sen at 162.59 before the 163.00 mark.

EUR/JPY Price Action – Daily Chart

• EUR/JPY depreciates by around 0.62% after BoJ’s hawkish signal on Thursday.
• BoJ’s Hajime Takata hinted at the possibility of exiting from monetary stimulus measures.
• The Euro receives downward pressure following subdued data from the Eurozone on Wednesday.

EUR/JPY drops to near 162.30 during the Asian session following hawkish signals from Bank of Japan (BoJ) board member Hajime Takata on Thursday. Takata emphasized the necessity for the BoJ to contemplate flexible responses, including the possibility of exiting from monetary stimulus measures.

BoJ’s Takata noted that the achievement of the 2% inflation target is coming into view despite uncertainties in the economic outlook. Exit measures under consideration would involve abandoning the yield curve control framework, discontinuing negative interest rates, and revisiting the overshoot commitment. It is essential to consider the balance between the effectiveness of easing measures and their potential side effects. Furthermore, Takata highlighted that the economy is transitioning into a phase characterized by rising wages and prices, moving away from the chronic deflationary cycle.

Furthermore, the Japanese Yen (JPY) could receive support due to concerns about potential intervention by Japanese authorities, which in turn undermines the EUR/JPY cross. Masato Kanda, Japan's vice finance minister for international affairs, stated that the government is prepared to take appropriate action against excessive exchange-rate movements and volatility.

In other economic news, Japanese Retail Trade year-over-year expanded by 2.3% in January, meeting expectations and slightly down from the previous increase of 2.4%. Additionally, the seasonally adjusted month-over-month data surged by 0.8%, reversing the previous decline of 0.8%.

The Euro (EUR) encountered difficulties following disappointing data from the Eurozone on Wednesday. Economic sentiment declined in February, dropping from 96.1 to 95.4, which fell short of estimates for an improvement to 96.7. Similarly, Consumer Confidence revealed an economic downturn with a consistent reading of -15.5 as expected.

Moreover, market participants are likely awaiting a barrage of key economic data from Germany, including Retail Sales, Consumer Price Index, and Unemployment data on Thursday.

• EUR/JPY trades on a softer note around 163.05 in Wednesday’s early European session.
• The positive outlook of the cross remains intact above the key EMA; RSI indicator supports the bullish momentum.
• The immediate resistance level is seen at 163.21; the key support level is located at the 162.60–162.70 zone.

The EUR/JPY cross finds support above the 163.00 psychological figure during the early European trading hours on Wednesday. The upbeat Japanese inflation data for January surprised the upside and sparked speculation that the Bank of Japan (BoJ) will exit negative interest rates by June this year. This, in turn, lifts the Japanese Yen (JPY) and weighs on the EUR/JPY cross. The cross currently trades near 163.05, down 0.09% on the day. 

Technically, EUR/JPY maintains the bullish bias unchanged as the cross holds above the 50- and 100-period Exponential Moving Averages (EMA) on the four-hour chart. The upward momentum is supported by the Relative Strength Index (RSI), which lies above the 50-midline, indicating the path of least resistance is to the upside. 

A high of February at 163.21 acts as an immediate resistance level for EUR/JPY. Further north, the upper boundary of the Bollinger Band at 163.60 will be the next upside barrier. A bullish breakout above this level will pave the way to a psychological mark at 164.00. 

On the flip side, the crucial support level will emerge at the 162.60–162.70 region, portraying the confluence of the lower limit of the Bollinger Band and the 50-period EMA. The additional downside filter to watch is the 100-period EMA at 161.90. The next contention level is seen at a low of February 15 at 160.91, followed by a low of February 12 at 160.38.

EUR/JPY four-hour chart

• EUR/JPY faces a 0.17% decline as Japan's core inflation rise hints at a possible end to negative interest rates.
• Technical patterns, including a 'bearish harami', suggest further downside, with key levels to watch at 162.56 and 162.00.
• Recovery above 163.00 could open the path to 164.00, contingent on overcoming resistance near the week's high at 163.72.

The EUR/JPY is dropping late in the North American session, set to register losses of around 0.17% on Tuesday. A rise in core inflation in Japan sparked speculation that the Bank of Japan (BoJ) could increase interest rates, ending the negative interest rate cycle. Therefore, the cross-pair trades at 163.22 after hitting a daily high of 163.52.

EUR/JPY Price Analysis: Technical outlook

From a technical standpoint, the EUR/JPY failed to extend its rally and edged lower. Nevertheless, price action is well contained within the boundaries of Monday’s price action, which would form a ‘bearish harami’ candlestick chart pattern, suggesting that further downside is expected.

If the EUR/JPY tumbles below 163.00 and decisively breaks below the February 26 low of 162.56, that would exacerbate a test of the 162.00 mark, but on its way south, sellers will face the Tenkan-Sen at 162,31.

Conversely, if buyers keep the exchange rate above 163.00, the EUR/JPY could edge higher above the current week's high at 163.72, which could pave the way for testing the 164.00 mark.

EUR/JPY Price Action – Daily Chart

• EUR/JPY attracts some sellers near 163.28 on the stronger-than-expected Japanese inflation data. 
• Japan’s two-year bond yield climbed to the highest level since 2011 amid growing speculation the BoJ will abandon its negative rate policy by spring. 
• ECB’s Lagarde reaffirmed its restrictive policy stance, as the decline in headline inflation acts as a safeguard against a sustained wage-price spiral.

The EUR/JPY cross trades in negative territory after being rejected from the multi-month highs of 163.50 during the early European trading hours on Tuesday. The hotter-than-expected Japanese CPI data has prompted investors to be more cautious about the probability of the BOJ exiting negative interest rate policy at the March meeting, which provides some support to the Japanese Yen (JPY). At press time, the cross is trading at 163.28, losing 0.15% on the day. 

The Japanese government bond (JGB) yields edge higher on Tuesday after Japan’s inflation data surprised to the upside, raising speculation that the Bank of Japan (BoJ) will exit negative interest rates by June this year. This, in turn, boosts the Japanese Yen and acts as a headwind for the EUR/JPY cross. 

Early Tuesday, the Japan Statistics Bureau revealed that the nation’s National Consumer Price Index (CPI) for January came in at 2.2% YoY from 2.6% in December. Meanwhile, the National CPI ex Fresh food came in better than expected, arriving at 2.0% YoY in January versus 2.3% prior.

On the Euro front, European Central Bank (ECB) President Christine Lagarde said on Monday that inflation continues to ease toward central bank targets. However, the ECB remains committed to restrictive policy measures for the time being. Lagarde added that the fourth-quarter wage growth numbers are positive, but not enough to give the ECB confidence that inflation has been conquered.  

Investors will take more cues from the German Consumer Price Index (CPI) and Eurozone Harmonized Index of Consumer Prices this week for fresh impetus. On the Japanese docket, the Industrial Production will be due on Thursday and the Unemployment Rate will be released on Friday. 

• EUR/JPY climbs, leveraged by JPY's broad decline on Japan's cooling economy and inflation forecasts.
• Technical momentum suggests a test of the 164.00 level, with potential resistance at November's peak.
• Initial support at 163.00, with further downside targets including Tenkan-Sen and Senkou Span A levels.

The EUR/JPY advances sharply and regains the 163.00 figure as traders capitalize on the broad Japanese Yen (JPY) weakness. The latest fundamental news from Japan is that its economy is cooling, while inflation is expected to get below the Bank of Japan's (BoJ) 2% goal on its core figures. At the time of writing, the pair exchanged hands at 163.55, up 0.42%.

From a technical perspective, EUR/JPY rose to a new year-to-date (YTD) high at 163.72, though the exchange rate retreated somewhat amid fears that Japanese authorities might intervene in the Forex markets. Given the backdrop, the uptrend remains intact, and the pair could challenge the 164.00 figure in the near term. A breach of that level would expose the November 16 high at 164.31, followed by the 165.00 mark.

On the flip side, the EUR/JPY first support would be the 163.00 figure. If sellers push the spot price below Monday’s low of 162.56, look for a deeper pullback past the Tenkan-Sen at 162.31 as bears eye the Senkou Span A at 161.61 before the Kijun-Sen at 160.90.

EUR/JPY Price Action – Daily Chart

• EUR/JPY trades on a weaker note around 162.85 in Monday’s early European session. 
• ECB's Stournaras said the central bank won’t have enough data to decide on rate cuts until June. 
• A technical recession in Japan might prompt the BoJ to delay an exit from negative rates, which exerts some pressure on the JPY. 

The EUR/JPY cross holds below the 163.00 mark during the early European session on Monday. The concern about a technical recession in Japan and the risk-on mood weigh on the Japanese Yen (JPY). However, the warning from Japanese authorities to intervene in the FX market might cap the downside of the JPY. The cross currently trades near 162.85, down 0.01% on the day. 

The European Central Bank (ECB) Governing Council member Yannis Stournaras said on Friday that the central bank won’t have enough data to decide on interest-rate cuts until June, despite inflation seeming to be on pace to reach the 2% target this year. Meanwhile, ECB policymaker Mario Centeno said the central bank might be ready to consider cutting rates next month, if data call for it, even if that’s only a low-probability event. That being said, the divergence of monetary policy between the ECB and the Bank of Japan (BoJ) provides some support to the Euro (EUR) and acts as a headwind for the EUR/JPY cross. 

On the other hand, Japan entered a technical recession as its Gross Domestic Product (GDP) unexpectedly contracted for two consecutive quarters and surrendered its position as the world's third-largest economy to Germany. The weaker GDP growth number might convince the BoJ to delay an exit from negative rates. This, in turn, drags the JPY lower against its rivals.

However, verbal intervention from the Japanese authorities might lift the JPY. Japan's Finance Minister Shunichi Suzuki said last week that the government is closely watching FX moves with a high sense of urgency. 

The Japan’s Consumer Price Index (CPI) for January will be due on Tuesday. On Thursday, the German Retail Sales and CPI data will be released. The attention will shift to the Eurozone Harmonized Index of Consumer Prices (HICP) data on Friday. Traders will take cues from the data and find trading opportunities around the EUR/JPY cross. 

 

• EUR/JPY finishes week with a 0.66% gain, reflecting persistent JPY softness against a backdrop of economic data.
• Technical analysis shows YTD high at 163.21, with support and resistance levels indicating potential upward momentum.
• Key technical levels outlined for potential reversals or further advances in the EUR/JPY pair's trajectory.

The EUR/JPY wraps up Friday session with losses of 0.02% but is set to finish the week with 0.66% gains, courtesy of overall Japanese Yen (JPY) weakness, as economic data doesn’t justify the Bank of Japan (BoJ) finishing negative interest rates. At the time of writing, the cross exchanges hands at 162.86, virtually unchanged.

From a technical standpoint, the pair printed a new year-to-date (YTD) high at 163.21 but failed to cling to gains above the 163.00 figure. That opened the door for a pullback, capped at around the day’s low of 162.64, which keeps buyers hopeful of higher prices. Achieving a daily close above 163.00 would open the door to testing the November 27 high at 163.72, ahead of the 164.00 mark.

Conversely, if sellers step in, they would clash with the Tenkan-Sen, first support at 162.11. the next support will emerge at January’s 19 high turned support at 161.87, followed by the Senkou Span A at 161.44.

EUR/JPY Price Action – Daily Chart

• EUR/JPY gains ground near 163.07 in Friday’s early European session. 
• German GDP growth numbers contracted 0.3% QoQ and 0.2% YoY in Q4. 
• The verbal intervention by Japanese authorities and the rising Middle East geopolitical tensions might cap the JPY’s downside. 
• Investors will monitor the German IFO survey for February and the ECB's Schnabel speech on Friday. 

The EUR/JPY cross extends its upside near the 163.00 psychological barrier during the early European session on Friday. The pair edges higher after the German GDP growth number for Q4 matched the market estimation. The cross currently trades around 163.07, gaining 0.12% on the day. 

The latest data from the Federal Statistics Office of Germany on Friday showed that the German Gross Domestic Product for the fourth quarter (Q4) contracted by 0.3% QoQ and 0.2% YoY in Q4. Both figures were in line with market expectations. 

On Thursday, the Eurozone Composite PMI for February came in higher than the consensus forecast, improving to 48.9 from 47.9 in January. The improvement in the Composite PMI was primarily due to an increase in the services PMI, which climbed to 50.0 in February from 48.4 the previous month. The Manufacturing PMI declined to 46.1 in February from 46.6 in January, worse than the expectation of 47.0. This report suggests that the Eurozone manufacturing sector remained in deep contraction territory in the first quarter of 2024. 

The minutes of the European Central Bank’s (ECB) January meeting illustrate the currently ongoing shift in the ECB’s inflation assessment, but the very cautious and gradual shift suggests that rate cuts in spring are highly unlikely. Instead, the ECB will want to wait until first-quarter data confirms receding inflationary pressure, a modest economic recovery, and no acceleration of wage growth to slightly reduce the current monetary policy restrictiveness. 

On the other hand, the verbal intervention by Japanese authorities might cap the downside of the Japanese Yen (JPY). Japan's Ministry of Finance and Bank of Japan (BoJ) governor have warned that they are closely watching the FX rate and would intervene in the market to prevent further weakening in the home currency if needed. Additionally, the escalating geopolitical tensions in the Middle East might boost the safe-haven currency JPY and act as a headwind for the EUR/JPY cross. 

Moving on, market participants will focus on the German IFO survey for February and ECB's Schnabel speech, due on Friday. Next week, the Japanese National Consumer Price Index (CPI) will be released. 

• EUR/JPY climbs 0.18%, buoyed despite optimism for ECB rate cuts in a disinflationary environment.
• Crossing Tenkan-Sen, targets 163.00 resistance, aiming for November's peak at 164.31 in ongoing uptrend.
• Potential pullback to find support at Tenkan-Sen (161.92), with subsequent supports at 161.34 and 160.77.

The Euro clings to decent gains versus the Japanese Yen late during the North American session, amid a mixed market mood. Eurozone (EU) economic data showed the disinflation process amongst countries in the bloc continued and has opened the door to discussions that the European Central Bank (ECB) might cut rates sooner rather than later. At the time of writing, the EUR/JPY exchanges hands at 162.91, up 0.18%.

The cross-pair has extended its gains past the Tenkan-Sen level and the 162.00 figure, as the Relative Strength Index (RSI) is close to entering overbought levels. However, as the uptrend remains strong, the RSI might get to the 80 level before the EUR/JPY tumbles. Therefore, the pair’s next resistance level sits at 163.00, followed by the November 16 high at 164.31.

On the flip side, if EUR/JPY retreats below the 162.00 mark, sellers could challenge the Tenkan-Sen at 161.92. Once cleared, the next support would be the Senkou Span A at 161.34 before challenging the Kijun-Sen level at 160.77.

EUR/JPY Price Action – Daily Chart