During Friday’s Asian session, the EUR/JPY pair slipped to about 176.60 as the yen gained strength on two fronts: hawkish hints in the Bank of Japan’s September meeting minutes and renewed verbal intervention by Japanese officials.
The released minutes showed a growing number of BOJ policymakers believe conditions are aligning for a rate hike, with two members even calling for an immediate increase in interest rates. At the same time, Finance Minister Satsuki Katayama warned that authorities are “monitoring foreign exchange movements with a high sense of urgency,” underscoring Tokyo’s readiness to defend the yen.
Meanwhile, the euro’s downside was limited by cautious signals from the European Central Bank. ECB President Christine Lagarde said the bank’s policy stance is “in a good place” and promised to act as needed to keep it that way. Fellow Governing Council member Boris Vujčić added that the ECB has “done its job” in bringing inflation back to target. Traders now assign under a 50 percent chance of a rate cut by July 2026, and Morningstar notes swap markets are pricing in merely a 25 basis‐point reduction by September 2026.
