Snapshot: EUR/JPY is grinding higher toward the 170.50 level as yesterday’s stable Eurozone negotiated wage tracker dampens expectations for rapid ECB rate cuts. This domestic wage resilience protects the Euro’s yield advantage against a fragile Yen, even as a sharp 4.48% drop in WTI crude oil provides a minor terms-of-trade buffer for JPY.
- Yesterday’s ECB wage tracker confirms stable negotiated wage pressures for 2026, giving the governing council’s hawks ample ammunition to oppose consecutive rate cuts and keeping the euro-zone yield curve supported.
- Japanese Ministry of Finance intervention risk remains the primary near-term threat, as extreme Yen weakness past prior intervention zones raises the probability of sudden verbal or physical MoF action during the NY session.
Bias into NY: We lean long EUR/JPY toward 171.20, using 169.80 as a tactical pivot. The Euro’s fundamental floor is well-defined by the sticky domestic wage outlook, while the Yen lacks the Bank of Japan rate momentum to drive any organic recovery.