Snapshot: EUR/JPY is trading around 170.50, building on gains made earlier in the week. The pair is primarily driven by divergence in BoJ and ECB monetary policy stances, with the ECB recently cutting rates while the BoJ maintains a slow normalisation bias. Focus now shifts to incoming US data.
- Watch for a break above 170.75 to confirm further upside momentum.
- Risk of intervention rises sharply on a sustained break of 171.00.
Bias into NY: Bullish, supported by the ECB’s mild easing bias contrasting with the BoJ’s slow normalisation, even as US yields show signs of stabilization, and with the household wage growth expectations data released from the BoJ this morning underscoring this divergence. Look for a test of 170.75 and potentially higher.