• EUR/JPY recorded a fresh 12-month low of 175.20 on Friday.
• The 14-day Relative Strength Index is at 34.76, indicating moderate, non-extreme downward momentum.
• The initial barrier lies at the nine-day EMA of 176.98.

EUR/JPY gains ground after two days of losses, trading around 176.10 during Asian hours on Friday. Technical analysis of the daily chart shows the currency cross remains within a descending channel pattern, indicating a persistent bearish bias.

The EUR/JPY cross is extending a corrective tone as it holds beneath the nine- and 50-period Exponential Moving Averages (EMAs). The currency cross remains capped by this layered dynamic resistance, keeping the near-term bias bearish, while the 14-day Relative Strength Index (RSI) at 34.76 sits just above oversold territory and hints that downside momentum is still present but not extreme.

The EUR/JPY cross reached the 12-month low of 175.20 on Friday. Further support lies at the lower boundary of its descending channel around 175.00. Further declines below this confluence support zone would open the doors for the currency cross to navigate the region around the 15-month low at 169.72.

On the upside, the primary barrier lies at the nine-day EMA of 176.98, followed by the upper boundary of the descending channel near 178.70. Further resistance lies at the 50-day EMA of 179.54. A move above the medium-term price average would cause a bullish reversal, supporting the EUR/JPY cross to explore the area around the all-time high of 187.95, reached on April 17.

BoJ’s Himino flags AI-driven inflation risks, keeping Yen on alert

BoJ’s Himino scores 8.2/10 on FXS Speechtracker, exactly in line with the historic average, signaling a consistently firm tone rather than a surprise shift. Emphasis on strong AI-related capex and exports, rising medium- and long-term inflation expectations, and underlying inflation nearing the 2% target point to a clearly hawkish bias that contrasts with still-accommodative financial conditions and low real rates.

The warning that postponing policy changes could heighten upside price risks and damage the economy reinforces expectations that the Bank of Japan is edging closer to further normalization. For FX, the combination of rapid bank lending, elevated inflation risks, and a stated aim to secure stable prices via suitable monetary policy supports a gradual move away from ultra-easy settings, a backdrop that is mildly supportive for the Yen if backed by concrete action.