Snapshot: EUR/JPY is trading at 185.36, up 0.20% on the day. The dominant domestic driver remains the Bank of Japan’s active monetary policy normalisation, with markets pricing further hikes. Today’s catalyst is ECB President Lagarde’s speeches later in the European session.
- BoJ’s 7-1 vote to hike rates to 1.00% signals a clear path for further tightening, with markets anticipating terminal rates of 1.00-1.25%.
- Watch for any communication from the MoF/BoJ regarding recent Yen weakness, which could trigger intervention risk.
Bias into NY: The setup favours continued upside for EUR/JPY as the BoJ normalisation narrative overrides the ECB’s tightening bias, with resistance at 186.00.