The EUR/JPY cross is currently on its sixth consecutive day of gains – and seventh positive move in the last eight trading days – reaching a fresh record high during Friday’s Asian session. Spot prices are presently trading just below the significant 180.00 psychological level and appear poised for further appreciation, primarily driven by the prevailing bearish sentiment surrounding the Japanese Yen (JPY).
Earlier this week, Japan’s Prime Minister Sanae Takaichi requested close policy coordination with the Bank of Japan (BoJ) to foster national economic development, signaling her administration’s preference for maintaining low interest rates. These comments have intensified uncertainty regarding the BoJ’s future policy tightening path, a key factor contributing to the JPY’s relative underperformance, and continue to provide a tailwind for the EUR/JPY cross.
Conversely, the shared currency, the Euro, seems to be bolstered by expectations that the European Central Bank (ECB) has concluded its interest rate cutting cycle. Indeed, most economists anticipate that the ECB will keep its deposit rate unchanged this year and throughout next year. This stance serves as another factor supporting the EUR/JPY cross, reinforcing the potential for an extension of its weekly breakout momentum through crucial resistance levels.
Market focus is now shifting to a busy Eurozone economic calendar. Key releases include preliminary Employment Change figures and the initial estimate for third-quarter GDP growth. The European Commission is also scheduled to unveil its latest economic growth projections, which are expected to influence the Euro (EUR) and provide fresh impetus to the EUR/JPY cross, which remains on track to post strong weekly gains.
