The Japanese Yen continues to underperform against its major peers during Wednesday’s quiet holiday session. This broad weakness has lifted EUR/JPY towards the 184.00 mark as European markets warm up, extending the rebound from Tuesday’s support level at 183.50.
A Stellar Year for the Cross Zooming out, the pair maintains a strong bullish bias, hovering just shy of the multi-year peak near 185.00 reached earlier in December. The cross is set to wrap up the year with substantial momentum, having appreciated over 14% throughout 2025.
The “Perfect Storm” Battering the Yen The Yen’s struggles this year stem largely from the Bank of Japan’s (BoJ) cautious stance. A sluggish approach to monetary normalization, compounded by fears of President Donald Trump’s trade tariffs on Japanese exports and Prime Minister Sanae Takaichi’s aggressive fiscal spending, has generated a “perfect storm.” These headwinds have firmly established the Yen as the weakest major currency of 2025.
Although the BoJ’s latest Summary of Opinions signaled a continued intent to tighten policy, the lack of a clear timeline for rate hikes keeps investors wary. Moreover, political resistance suggests the government favors only a slow normalization path. Given these dynamics, any potential recovery for the Yen appears capped.
ECB Pivot Boosts Euro Conversely, the Euro has found renewed strength on signs that the European Central Bank (ECB) has concluded its easing cycle. Market consensus is shifting toward a rate hike as the next policy move—possibly in the second half of next year—adding a bullish tailwind to the single currency in recent weeks.
