Snapshot: EUR/JPY trades at 183.82, up 0.08% on the day. The dominant domestic driver remains the diverging monetary policy stances of the ECB and BoJ, with today’s Tokyo Core CPI data providing the immediate catalyst. Markets are pricing in further tightening from both central banks, but the BoJ’s real rates remain deeply negative.
- BoJ’s active normalisation path contrasts with the ECB’s tightening bias, driven by persistent inflation concerns.
- Watch for any hawkish signals from the BoJ’s Tamura speech overnight and the Tokyo CPI print at 08:30 JST.
Bias into NY: The setup favours continued upside for EUR/JPY, underpinned by the BoJ’s commitment to further normalisation and the market’s pricing of potential further ECB hikes. A sustained break above 184.00 could open the door to further gains.