EUR/JPY Price Forecast: Keeps bullish vibe, first upside target emerges above 163.00
- EUR/JPY climbs to near 162.35 in Wednesday’s early European session, adding 0.31% on the day.
- The positive view of the cross prevails above the key 100-day EMA with the bullish RSI indicator.
- The immediate resistance level emerges at 163.03; the key support level to watch is in the 161.00-160.90 zone.
The EUR/JPY cross gathers strength to near 162.35 during the early European session on Wednesday. The Japanese Yen (JPY) weakens against the Euro (EUR) amid the generally positive tone around the equity markets. Nonetheless, the growing speculation that the Bank of Japan (BoJ) will continue raising interest rates might cap the downside for the JPY.
Technically, the constructive outlook of EUR/JPY remains in place as the cross is well-supported above the key 100-day Exponential Moving Average (EMA) on the daily chart. The upward momentum is reinforced by the Relative Strength Index (RSI), which stands above the midline near 57.15, displaying bullish momentum in the near term.
The first upside target for the cross emerges at 163.03, the high of March 25. Extended gains could see a rally to 164.20, the high of March 18. The additional upside filter to watch is 164.89, the upper boundary of the Bollinger Band.
On the flip side, the crucial support level for EUR/JPY is located in the 161.00-160.90 region, the psychological level and the 100-day EMA. Sustained trading below the mentioned level could see a drop to the next contention level at 159.12, the low of March 6. The next downside target to watch is 158.15, the low of March 5.
EUR/JPY daily chart
Japanese Yen FAQs
The Japanese Yen (JPY) is one of the world’s most traded currencies. Its value is broadly determined by the performance of the Japanese economy, but more specifically by the Bank of Japan’s policy, the differential between Japanese and US bond yields, or risk sentiment among traders, among other factors.
One of the Bank of Japan’s mandates is currency control, so its moves are key for the Yen. The BoJ has directly intervened in currency markets sometimes, generally to lower the value of the Yen, although it refrains from doing it often due to political concerns of its main trading partners. The BoJ ultra-loose monetary policy between 2013 and 2024 caused the Yen to depreciate against its main currency peers due to an increasing policy divergence between the Bank of Japan and other main central banks. More recently, the gradually unwinding of this ultra-loose policy has given some support to the Yen.
Over the last decade, the BoJ’s stance of sticking to ultra-loose monetary policy has led to a widening policy divergence with other central banks, particularly with the US Federal Reserve. This supported a widening of the differential between the 10-year US and Japanese bonds, which favored the US Dollar against the Japanese Yen. The BoJ decision in 2024 to gradually abandon the ultra-loose policy, coupled with interest-rate cuts in other major central banks, is narrowing this differential.
The Japanese Yen is often seen as a safe-haven investment. This means that in times of market stress, investors are more likely to put their money in the Japanese currency due to its supposed reliability and stability. Turbulent times are likely to strengthen the Yen’s value against other currencies seen as more risky to invest in.