- The EUR/JPY bounces from below 162.00 after Friedrich Merz’s confirmation as a new German chancellor.
- The German Merz failed to ensure an absolute majority in the first voting process in the Bundestag.
- Trump’s tariff threats on pharmaceutical imports have increased the demand for safe JPY refuge.
The EUR/JPY pair bounces above 162.00 during the negotiation session in North America after attracting offers about 161.60, which is the minimum intradia. The pair recovers as the conservative leader of Germany, Friedrich Merz, ensures an absolute majority after obtaining 325 votes in the Bundestag or the lower house of Parliament in the second attempt.
Friedrich Merz received 310 votes in the first attempt, six less than the 316 required to be elected German chancellor even though the CDU/CSU and social democrats together control 326 votes in the Bundestag.
Friedrich Merz’s confirmation as Chancellor has decreased fears of political instability and is expected to drive the expenditure measures approved in March.
However, the firm expectations that the European Central Bank (ECB) will reduce interest rates at the June policy meeting will limit the uprising potential of the euro (EUR). It is widely expected that the ECB cuts the interest rates in 25 basic points (PBS). This will be the seventh cut of consecutive interest rates by the ECB. The reason behind the firm bets of the ECB is the high conviction that the inflation of the euro zone is on its way to returning to the target of the central bank of 2% by the end of the year.
Meanwhile, the Japanese Yen (JPY) works strongly since the new tariff threats of the president of the United States (USA), Donald Trump, have increased their demand for safe refuge. Trump threatened to impose tariffs on pharmaceutical imports, which will be announced in two weeks.
And in Japanese price today
The lower table shows the rate of change of Japanese Yen (JPY) compared to the main currencies today. Yen Japanese was the strongest currency against the Swiss Franco.
| USD | EUR | GBP | JPY | CAD | Aud | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.22% | -0.55% | -0.59% | -0.23% | -0.14% | -0.45% | 0.22% | |
| EUR | 0.22% | -0.34% | -0.36% | -0.02% | 0.07% | -0.23% | 0.44% | |
| GBP | 0.55% | 0.34% | -0.04% | 0.32% | 0.44% | 0.11% | 0.81% | |
| JPY | 0.59% | 0.36% | 0.04% | 0.35% | 0.45% | 0.22% | 0.82% | |
| CAD | 0.23% | 0.02% | -0.32% | -0.35% | 0.09% | -0.22% | 0.48% | |
| Aud | 0.14% | -0.07% | -0.44% | -0.45% | -0.09% | -0.31% | 0.39% | |
| NZD | 0.45% | 0.23% | -0.11% | -0.22% | 0.22% | 0.31% | 0.69% | |
| CHF | -0.22% | -0.44% | -0.81% | -0.82% | -0.48% | -0.39% | -0.69% |
The heat map shows the percentage changes of the main currencies. The base currency is selected from the left column, while the contribution currency is selected in the upper row. For example, if you choose the Japanese yen from the left column and move along the horizontal line to the US dollar, the percentage change shown in the picture will represent the JPY (base)/USD (quotation).
In the domestic front, investors expect the minutes of the Monetary Policy Meeting of the Bank of Japan (BOJ), which will be published on Wednesday.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
