Snapshot: EUR/JPY trades at 183.94, down 0.35% on the day, as markets digest divergent central bank policy paths. Today’s European PMIs offer the immediate catalyst, with the ECB maintaining a tightening bias against the BoJ’s active normalisation.
- The BoJ’s recent 7-1 hike to 1.00% signals a clear intent for further normalisation, while the ECB’s July meeting is priced with ~50% odds of another hike.
- Watch for any significant deviations in French and German PMIs from forecasts; a sharp miss could pressure EUR, while a beat might reinforce the ECB’s hawkish lean.
Bias into NY: The pair remains range-bound, but the underlying divergence in monetary policy favours upside for EUR/JPY over the medium term, provided energy shocks don’t derail the ECB’s path. A break above 184.50 would signal renewed upside.