- EUR/JPY retreats for the second consecutive day and falls below the 200-day SMA.
- Intervention fears offer some support to the JPY and put downward pressure on the cross.
- Expectations of less aggressive rate cuts by the ECB could limit losses for the common currency and spot prices.
The EUR/JPY remains under some selling pressure for the second day in a row and falls to a two-week low around the mid-164.00 zone during the Asian session on Friday. The decline is driven by a combination of factors and drags spot prices below a technically significant 200-day simple moving average (SMA).
The Japanese Yen (JPY) continues to receive support from speculation about possible government intervention to shore up the domestic currency, which, in turn, is weighing on the EUR/JPY cross. In fact, Japan’s Chief Cabinet Secretary Yoshimasa Hayashi reiterated earlier this week that the government intended to closely watch movements in the currency market with a greater sense of urgency. Separately, Deputy Finance Minister for International Affairs and Japan’s top foreign exchange official, Atsushi Mimura, said the government is ready to take appropriate action against excessive movements in the currency market if necessary.
Added to this is that Japan’s Finance Minister, Katsunobu Kato, said this Friday that the government will closely monitor the impact of President-elect Donald Trump’s policies on the domestic economy. Additionally, quarterly data from the Ministry of Finance (MOF) showed that Japan spent ¥5.53 trillion on currency intervention during the period from June 27 to July 29. Meanwhile, modest US Dollar (USD) strength sparks some selling around the common currency, which, in turn, contributes to the offered tone surrounding the EUR/JPY cross and intraday decline.
That said, a generally positive risk tone, coupled with doubts about the Bank of Japan’s ability to tighten monetary policy further, could cap gains for the safe-haven JPY and limit the currency pair’s losses. Donald Trump’s victory in the US presidential election fueled optimism about stronger economic growth. Added to this is that hopes of additional stimulus from China continue to boost investor confidence and support the optimistic mood. Meanwhile, investors appear convinced that Japan’s political landscape could make it difficult for the BoJ to raise interest rates this year.
Additionally, data released on Thursday showed that real wages and household spending in Japan declined for the second straight month in September. This could affect the inflation outlook and delay the BoJ’s rate hike plans. Added to this is that expectations of a less dovish European Central Bank (ECB) could stop traders from placing aggressive bearish bets on the Euro and offer some support to the EUR/JPY cross. This makes it prudent to wait for a follow-up sale before confirming that spot prices have peaked in the short term and positioning for deeper losses.
Japanese Yen PRICE Today
The table below shows the percentage change of the Japanese Yen (JPY) against major currencies today. Japanese Yen was the strongest currency against the Australian Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.19% | 0.12% | -0.06% | 0.17% | 0.38% | 0.21% | 0.12% | |
| EUR | -0.19% | -0.07% | -0.21% | -0.02% | 0.19% | 0.03% | -0.07% | |
| GBP | -0.12% | 0.07% | -0.14% | 0.06% | 0.27% | 0.10% | -0.02% | |
| JPY | 0.06% | 0.21% | 0.14% | 0.22% | 0.43% | 0.26% | 0.15% | |
| CAD | -0.17% | 0.02% | -0.06% | -0.22% | 0.20% | 0.05% | -0.07% | |
| AUD | -0.38% | -0.19% | -0.27% | -0.43% | -0.20% | -0.17% | -0.28% | |
| NZD | -0.21% | -0.03% | -0.10% | -0.26% | -0.05% | 0.17% | -0.11% | |
| CHF | -0.12% | 0.07% | 0.02% | -0.15% | 0.07% | 0.28% | 0.11% |
The heat map shows percentage changes for major currencies. The base currency is selected from the left column, while the quote currency is selected from the top 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 box will represent the JPY (base)/USD (quote).
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.
