Snapshot: EUR/JPY faces steady downward pressure as yesterday’s stable Eurozone wage tracker data cements the case for ECB doves preparing another rate cut from the current 2.50% depo level. This domestic softening is exacerbated by a sudden pick-up in safe-haven yen demand, as a shift in global risk appetite triggers broad yen short-covering ahead of the New York open.
- The latest ECB wage tracker confirming stable negotiated wage pressures in 2026 keeps a mild easing bias active, capping the single currency’s recovery potential while the BoJ maintains a slow normalisation bias.
- Elevated market volatility, highlighted by a 12.4% daily spike in the VIX to 18.44 and a 4.5% slide in WTI crude, heightens yen short-covering risks that easily overwhelm the underlying carry advantage.
Bias into NY: We maintain a bearish bias for EUR/JPY into the New York session, looking for a drift lower toward key psychological support levels as stable Eurozone wage metrics and Japanese intervention threats deter carry buyers.