empty
13.05.2025 06:24 PM
EUR/JPY. Analysis and Forecast

This image is no longer relevant

The EUR/JPY pair is losing slight ground, holding losses below 164.40 following the release of the ZEW Economic Sentiment Surveys for Germany and the Eurozone.

In May, Germany's ZEW Economic Sentiment Index surged to 25.2, marking a sharp rebound from -14 in April and significantly exceeding the market forecast of 11.9. Similarly, the Eurozone's ZEW sentiment index rose to 11.6 in May from -18.5 in the previous month. These figures indicate improved economic expectations in the region, which could support the euro.

According to Reuters, several ECB officials, despite some internal disagreements, believe their current policy stance reinforces existing strategies and paths toward rate cuts, citing inflation and ongoing trade uncertainties. This is a key reason the euro remains under pressure.

Meanwhile, the Japanese yen has strengthened despite persistent uncertainty regarding the Bank of Japan's interest rate path. BoJ Deputy Governor Shinichi Uchida acknowledged both upside and downside risks linked to potential U.S. tariffs, warning that such trade measures could weigh on Japan's economy. He noted that if global economic conditions improve, Japan's economic growth may decelerate to a potential level before gradually recovering.

Against the backdrop of a tight labor market, Uchida also emphasized rising wages, cautioning that companies are likely to continue passing on higher labor costs to consumers. According to him, this could help support underlying inflation by lifting inflation expectations over time.

The BoJ's Summary of Opinions from its April 30–May 1 policy meeting underscores ongoing uncertainty. One board member stated that if economic and inflation trends improve, further rate hikes are likely. However, another warned that U.S. trade policy—especially higher tariffs—poses a significant threat to Japan's economic outlook and inflation trajectory.

As such, the EUR/JPY pair's movements will depend on the economic data from both regions, as well as decisions and commentary from ECB and BoJ officials regarding monetary policy. Traders should closely monitor these developments to make informed trading decisions.

From a technical standpoint, the nearest resistance for the pair is the monthly high at 164.92, followed by the psychological level of 165.00.

Moreover, oscillators on the daily and 4-hour charts remain in positive territory, confirming the bullish outlook. Still, before opening new long positions, it would be prudent to wait for a breakout above the 165.00 level and a firm hold above it.

Irina Yanina,
Analytical expert of InstaForex
© 2007-2025
Select timeframe
5
min
15
min
30
min
1
hour
4
hours
1
day
1
week
Earn on cryptocurrency rate changes with InstaForex
Download MetaTrader 4 and open your first trade
  • Grand Choice
    Contest by
    InstaForex
    InstaForex always strives to help you
    fulfill your biggest dreams.
    JOIN CONTEST

Recommended Stories

What to Pay Attention to on July 3? A Breakdown of Fundamental Events for Beginners

A significant number of macroeconomic reports are scheduled for release on Thursday, including some key reports. As a reminder, U.S. labor market and unemployment data are typically released on Friday

Paolo Greco 06:53 2025-07-03 UTC+2

GBP/USD Overview – July 3: Jerome Powell Finally Responded to Trump

The GBP/USD currency pair plummeted on Wednesday like a stone. However, every drop in the pair eventually gives way to a much stronger rise. Therefore, at this point, there's

Paolo Greco 03:45 2025-07-03 UTC+2

EUR/USD Overview – July 3: One Big Trump Law Passed, Dollar at 4-Year Lows

The EUR/USD currency pair traded relatively calmly on Wednesday, although the word "calm" may not accurately describe the daily decline of the dollar. The most accurate picture of what's happening

Paolo Greco 03:45 2025-07-03 UTC+2

Transition from Aggressive to Cautious Position by the ECB

The annual economic forum is currently taking place in the Portuguese town of Sintra, which explains the daily speeches by central bank heads. Most of the information being shared

Chin Zhao 00:42 2025-07-03 UTC+2

USD/JPY. Yen: Interrupted Flight

The USD/JPY pair dropped by 200 points over two days and on Tuesday hit a nearly four-week low, testing the support level at 142.70 (the middle line of the Bollinger

Irina Manzenko 00:38 2025-07-03 UTC+2

The Dollar Has Found Its Achilles' Heel

Be careful what you wish for. Euro supporters believe that EUR/USD will reach at least 1.25 by 2026. However, one must understand that while the eurozone may remain a unified

Marek Petkovich 00:38 2025-07-03 UTC+2

USD/JPY. Analysis and Forecast

Recent political and economic statements are having a significant impact on the USD/JPY pair's dynamics. U.S. President Donald Trump expressed frustration over the prolonged trade talks with Japan

Irina Yanina 18:51 2025-07-02 UTC+2

Crowd sets tone, market follows

No fight. The S&P 500 managed to hit new record highs because market professionals — the so-called "smart money" — see no need to go against the prevailing momentum

Marek Petkovich 12:46 2025-07-02 UTC+2

AUD/USD. Analysis and Forecast

Today, the AUD/USD pair is retreating slightly from the new yearly high near 0.6590 reached yesterday and is trading within a narrow range. Nevertheless, the potential for further downside appears

Irina Yanina 12:44 2025-07-02 UTC+2

USD/CHF. Analysis and Forecast

The USD/CHF pair continues to trade within a narrow range above the 0.7900 level, remaining close to price levels last seen in 2011. The US dollar is showing some gains

Irina Yanina 11:58 2025-07-02 UTC+2
Can't speak right now?
Ask your question in the chat.
Widget callback
 

Dear visitor,

Your IP address shows that you are currently located in the USA. If you are a resident of the United States, you are prohibited from using the services of InstaFintech Group including online trading, online transfers, deposit/withdrawal of funds, etc.

If you think you are seeing this message by mistake and your location is not the US, kindly proceed to the website. Otherwise, you must leave the website in order to comply with government restrictions.

Why does your IP address show your location as the USA?

  • - you are using a VPN provided by a hosting company based in the United States;
  • - your IP does not have proper WHOIS records;
  • - an error occurred in the WHOIS geolocation database.

Please confirm whether you are a US resident or not by clicking the relevant button below. If you choose the wrong option, being a US resident, you will not be able to open an account with InstaForex anyway.

We are sorry for any inconvenience caused by this message.