Snapshot: EUR/JPY hovers around 169.75, driven by the persistent expectation of a further BOJ rate hike despite recent ECB easing. Wage data strengthening the case for BOJ normalisation remains the dominant driver. Focus shifts to potential MoF intervention as Yen weakness persists.
- Watch for a break above 170.00, which would signal renewed upside momentum fueled by widening monetary policy divergence.
- Risk: Unexpected dovish signals from BOJ officials could trigger a sharp reversal, particularly given stretched Yen short positioning.
Bias into NY: Bullish EUR/JPY while the BOJ normalisation narrative remains intact and the ECB maintains a mild easing bias; eyeing a test of 170.00. A break above that level would open the path towards 171.00.