EUR/JPY breaks the three -day loss streak

• The EUR/JPY bounces 163.20 on Monday after three days of losses, limited by resistance about 165.00.
• The inflation of the Eurozone remained unchanged in April: the general inflation by 2.2%, the stable underlying IPC in 2.7%, reinforcing the bets for a cut of the ECB rates in June.
• Uchida del Boj indicates the potential of more increases if the recovery is maintained; IPC and Japan trade data are expected this week.
• The EUR/JPY remains above the 50 -day EMA about 162.26; The widest range between 161.00 and 165.00 remains intact.

The EUR/JPY is modestly listed up to 163.20 on Monday, breaking a three -day streak, while investors digest the stable inflation data of the Eurozone, the flexible policy signals of the Bank of Japan (BOJ) and the new geopolitical developments before the important economic releases.

The last figures of the Harmonized Consumer Price Index (HICP) of EurosTat confirmed that the general inflation of the Eurozone remained at 2.2% in April, while the underlying inflation remained stable at 2.7%, both coinciding with the forecasts. The aligned data keep the European Central Bank (ECB) on the way to a rate cut of 25 basic points widely expected in June, since those responsible for the policy focus on the persistent risks of growth and in an still anchored inflation perspective.

On the Japanese side, the vice governor of the Boj, Shinichi Uchida, declared that the Central Bank could continue to increase interest rates if the Japan economy recovers from the impact of the highest US tariffs, pointing out that inflation will probably be maintained near the 2% objective if the conditions are developed as projected. However, Uchida also warned that the perspective of global trade remains highly uncertain.

This week’s trade balance of Japan, which will be published on Tuesday, and consumer price index (CPI) data on Thursday will be observed closely in search of more signals. A possible acceleration in underlying inflation could strengthen the case of the BOJ for additional tightening, while commercial figures will offer a snapshot of Japan’s export performance in the midst of tariff -driven interruptions.

Geopolitical headlines are also influencing the feeling. The European Union (EU) and the United Kingdom (RU) reached a tentative agreement in multiple areas, including defense, fishing and youth mobility, before an UE-RU key summit. According to EU officials, the agreement would allow British companies to participate in EU defense contracts, marking a progress in post-overxit cooperation and offering possible winds in favor for the euro.

Meanwhile, in Asia, Japanese Prime Minister Shigeru Ihiba reiterated that Japan will not accept any initial commercial agreement with the US that excludes cars, pressing Washington to lift its 25% tariff on Japanese cars. The position underlines the firm position of Japan in the ongoing commercial conversations and highlights the persistent risks of protectionist measures, which continue to support the safe refuge flows towards the Japanese yen.

From a technical point of view, the EUR/JPY remains within a consolidation range between 161.00 and 165.00, bouncing from the support and quoting above the 50 -day exponential mobile average (EMA) in 162.26. The relative force index (RSI) of 14 days about 52 indicates a neutral impulse, without immediate rupture signals. A daily closure would be needed above 165.00 to confirm a bullish continuation, while a movement below 161.00 could open the door to deeper losses.