EUR/JPY Struggles Near Two-Week Low Ahead of Key Eurozone Inflation Data
The EUR/JPY pair is trading close to a two-week low, holding around the mid-173.00s. Earlier in the Asian session, it tried to rise toward 174.00 but failed to break higher and quickly slipped back.
The Japanese yen is gaining strength as traders expect the Bank of Japan (BoJ) to raise interest rates soon. At the latest BoJ meeting, officials hinted at the possibility of a 25 basis-point hike in October. This speculation has kept the yen supported.
Another factor helping the yen is its role as a safe-haven currency. With global uncertainty rising and fears of a possible U.S. government shutdown, investors are moving toward safer assets like the yen.
On the euro side, traders are waiting for the Eurozone inflation (HICP) report, which could decide the next move for the European Central Bank (ECB). The result will be key in shaping short-term direction for the euro.
Overall, the BoJ’s hawkish tone is standing out compared to other major central banks. This difference in policy outlook keeps pressure on the euro and makes it harder for the EUR/JPY pair to bounce back strongly.
Impact:
EUR/JPY could stay under pressure if yen demand continues. A stronger or weaker Eurozone inflation reading might shift momentum and possibly trigger fresh moves in the pair.