- EUR/JPY rebounded into the mid-135.00s as the yen suffered from higher yields and the euro benefitted from hot EZ inflation.
- ECB rhetoric was also notably more hawkish and, as a result, short-term EUR/JPY bulls are eyeing a retest of 137.00.
EUR/JPY rebounded back into the mid-135.00s on Friday as higher yields, particularly in the US weighed on the rate-sensitive yen and positive Russo-Ukraine rhetoric, hot Eurozone inflation and hawkish ECB commentary supported the euro. The pair, which hit lows in the 134.50 area during the Asia Pacific session, now trades with on-the-day gains of about 0.5% in the 135.30s. From a technical standpoint, recent price action isn't particularly notable, with the pair merely swinging within this week’s already well-established ranges.
With recent hot Eurozone inflation figures and increasingly hawkish sounding rhetoric from ECB members suggesting upside risks to Eurozone yields in the week ahead (lots of focus will be on the ECB minutes release on Thursday) many short-term bulls will be hoping that Friday’s recovery is the start of a more lasting move higher back towards this week’s highs in the 137.00 area. Geopolitical developments could make or break EUR/JPY’s short-term bullish prospects, with market participants waiting with abated breath to hear how Friday’s virtual Russo-Ukraine peace talks went.
Another geopolitical risk that EUR/JPY traders should be watching is the ongoing saga relating to Russia’s demands for rouble payments for gas exports. Any signs that Russia might cut gas to the Eurozone would be a big negative for the euro, as such an eventuality would quickly thrust the bloc’s economy into a deep recession amid energy rationing. Things don’t look like they are heading that way at the moment, so for now, EUR/JPY can maintain an upside bias.
Note: All information on this page is subject to change. The use of this website constitutes acceptance of our user agreement. Please read our privacy policy and legal disclaimer. Opinions expressed at FXstreet.com are those of the individual authors and do not necessarily represent the opinion of FXstreet.com or its management. Risk Disclosure: Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.
Recommended content
Editors’ Picks

EUR/USD regains traction and bounces off daily lows
After bottoming out near 1.0450, EUR/USD managed to regain some balance and revisit the 1.0470 zone on the back of alternating risk appetite trends in the FX world and amid investors' assessment of the German elections.

GBP/USD hovers around 1.2630 amid a vacillating Dollar
GBP/USD alternates gains with losses in the low-1.2600s in response to the lack of a clear direction in the global markets and a lacklustre price action surrounding the Greenback.

Gold extends consolidative phase near record highs
Prices of Gold glimmered higher on Monday, hitting an all-time high around $2,955 per ounce troy on the back of the US Dollar's inconclusive price action as investors are warming up for a key inflation report due toward the end of the week.

Bitcoin Price Forecast: BTC standoff continues
Bitcoin has been consolidating between $94,000 and $100,000 since early February. Amid this consolidation, investor sentiment remains indecisive, with US spot ETFs recording a $540 million net outflow last week, signaling institutional demand weakness.

Money market outlook 2025: Trends and dynamics in the Eurozone, US, and UK
We delve into the world of money market funds. Distinct dynamics are at play in the US, eurozone, and UK. In the US, repo rates are more attractive, and bills are expected to appreciate. It's also worth noting that the Fed might cut rates more than anticipated, similar to the UK. In the eurozone, unsecured rates remain elevated.

The Best brokers to trade EUR/USD
SPONSORED Discover the top brokers for trading EUR/USD in 2025. Our list features brokers with competitive spreads, fast execution, and powerful platforms. Whether you're a beginner or an expert, find the right partner to navigate the dynamic Forex market.