The EUR/JPY pair rose 0.27% on Friday, trading near 183.70. The Euro is benefiting from stronger-than-expected growth, with German and Eurozone Q4 GDP both expanding by 0.3%. Additionally, a resilient labor market—highlighted by a drop in unemployment to 6.2%—provides further support. However, gains may be limited as ECB policymakers begin discussing potential rate cuts to protect export competitiveness and manage disinflation.
Conversely, the Japanese Yen faces downward pressure following a sharp decline in Tokyo’s CPI for January. This cooling inflation reduces the immediate need for Bank of Japan (BoJ) tightening. When combined with domestic political uncertainty and upcoming elections, the Yen remains weak, allowing the EUR/JPY to maintain its upward momentum
