Snapshot: EUR/JPY faces mounting selling pressure around the 170.00 level as Euro bulls retreat following this morning’s 08:00 ECB wage tracker, which flagged stable negotiated wage pressures for 2026. This print cements the ECB’s mild easing bias after April’s 25bp cut to 2.50%, leaving the cross vulnerable to downside ahead of ECB President Lagarde’s speech at 12:50 CET.
- Softening Eurozone wage pressures and Core HICP at 2.3% support the doves’ case for a follow-up cut, limiting Euro upside even as Philip Lane’s recent balanced outlook keeps the near-term policy path highly data-dependent.
- BoJ normalisation bias remains a slow-burning tailwind for the Yen, with strong spring shunto wage data keeping a second 2026 rate hike from 0.50% on the table while MoF intervention warnings cap near-term upside.
Bias into NY: We hold a bearish bias on the Euro/Yen cross targeting a run toward 169.20, expecting ECB easing expectations to dominate the pair’s direction, particularly if US 10-year yields consolidate below 4.47% to curb broader risk-on flows.