EUR/JPY Drops Below 165.00 Amid Rising Trade Concerns and Weak US Dollar
The EUR/JPY currency pair fell to around 164.85 on Monday after gaining for two days in a row. This drop happened because of growing worries about global trade and a weaker US dollar. Investors are buying more Japanese Yen as a safe option, which makes the yen stronger.
There is talk that the Bank of Japan might raise interest rates in their upcoming meeting, which could make the yen even stronger. Meanwhile, the European Central Bank recently cut its interest rates by 0.25%. ECB President Christine Lagarde said the rates are now in a “good position.” However, rising trade tensions, especially about US tariffs, are hurting demand for the euro.
Japan’s economy showed less decline than expected. Earlier, it was thought that Japan’s GDP fell by 0.7% in the first quarter of 2025, but new data shows the fall was only 0.2%. This smaller drop is positive for the yen.
In the coming days, traders will closely watch news about global trade and central banks because these will affect how EUR/JPY moves.
Impact: If trade worries increase and the US dollar stays weak, EUR/JPY could fall further. But if trade talks improve or the dollar gets stronger, the euro might gain against the yen.