Snapshot: EUR/JPY is trading around 170.50, marginally higher, driven by the perceived dovishness of the ECB relative to the BoJ. While the ECB delivered a 25bp cut last month, signalling potential for further easing, the BoJ remains cautious, maintaining its 0.50% rate and only hinting at future hikes if economic projections align. Today’s data calendar is light until US data at 08:30 ET.
- Key support lies at 170.00, while resistance is around 171.00.
- Watch for any further comments from BoJ officials regarding intervention, especially with the pair testing prior intervention levels.
Bias into NY: Mildly bullish on EUR/JPY as the market continues to price in divergence between the ECB and BoJ policy paths, targeting 171.00. USD strength, as reflected in the USD Broad Index at 119.2825, could provide a headwind, but the dominant driver remains the central bank divergence.