Snapshot: EUR/JPY is trading at 183.25, down 0.32% on the day. The dominant domestic driver remains the divergent central bank paths, with both the ECB and BoJ signalling further tightening. Today’s catalyst is the BoJ’s Summary of Opinions, which reinforces their active normalisation stance.
- BoJ’s active normalisation bias, with markets pricing terminal rates at 1.00-1.25%, continues to underpin Yen weakness against a hawkish ECB.
- Watch for any communication from the MoF/BoJ regarding intervention levels, as Yen weakness approaches historical zones.
Bias into NY: The setup favours continued Yen weakness as the BoJ signals further hikes and real rates remain deeply negative, while the ECB navigates sticky inflation. We look for upside towards 184.00 if risk sentiment holds.