- EUR/JPY Slides as JPY Gains Momentum on Hawkish BoJ Expectations
- Market Sentiment Shifts as ECB Rate Cut Bets Weigh on Euro
The EUR/JPY pair is facing downward pressure on Friday as the Japanese Yen (JPY) continues to attract strong buying interest. Trading around the 159.00 mark, the pair struggles to maintain its bounce from a one-month low near mid-158.00s.
The JPY’s strength is supported by expectations of a hawkish stance from the Bank of Japan (BOJ) and a cautious tone in the equity markets. Recent data showing a rise in real wages in Japan for the second consecutive month has reinforced expectations of a BOJ rate hike by the year-end.
On the other hand, the Euro is under pressure due to bets for a rate cut by the European Central Bank (ECB) in September following a decline in Eurozone inflation. This divergence in monetary policy outlooks is contributing to the decline in the EUR/JPY pair.
While the USD weakness, driven by expectations of a larger interest rate cut by the Federal Reserve (Fed), is providing some support to the Euro, the overall sentiment remains bearish for the EUR/JPY cross. Traders are cautious about aggressive selling, which could limit the downside potential.
Overall, the EUR/JPY pair is on track to record its third consecutive week of losses, reflecting the impact of central bank policies and market sentiment on currency pairs.