• EUR/JPY falls 1.37% on Thursday as the Japanese Yen strengthens sharply.
• Japan’s top currency diplomat reiterates that authorities remain ready to intervene in the foreign exchange market.
• Eurozone PMI data remains mixed, with persistent weakness in the German and French services sectors.

EUR/JPY falls sharply on Thursday and trades around 181.40 at the time of writing, down 1.37% on the day. The Japanese Yen (JPY) strengthens significantly against the Euro (EUR), supported by renewed warnings from Japanese authorities over foreign exchange market moves.

Japan’s top currency diplomat Atsushi Mimura reiterates on Thursday that authorities remain ready to act in the foreign exchange market. “We continue to stand ready on forex,” Mimura says, according to Reuters. Asked whether authorities have recently conducted rate checks with market participants, a practice that can precede an intervention, he declines to comment.

Mimura adds that he is “neither at ease nor satisfied” with current foreign exchange market conditions. These comments keep the threat of Japanese intervention alive and help support the Yen, although they provide no confirmation that authorities have already taken concrete action.

On the European side, activity data offers little support to the Euro. The Eurozone HCOB Services Purchasing Managers Index (PMI) is revised down to 51.7 in August from the preliminary estimate of 51.8, while the Composite PMI is also lowered to 52.0 from 52.1 initially estimated. Both indicators nevertheless remain above the 50 threshold, signaling an expansion in activity.

Divergences among the Eurozone’s major economies remain significant. In Germany, the Services PMI is revised higher to 49.7 from the preliminary estimate of 48.5 but remains below the 50 threshold separating expansion from contraction. France shows even weaker performance, with the index revised down to 48.0 from 48.4 initially. In contrast, Italy and Spain report stronger Services PMI readings of 55.2 and 57.8, respectively.

Meanwhile, the Eurozone Producer Price Index (PPI) points to accelerating factory-gate price pressures. Producer prices rise 1.6% MoM in July after contracting 0.3% in June, exceeding expectations for a 1.2% increase. On an annual basis, the PPI rises 5.8%, up from 4.6% previously.

These figures point to persistent upstream price pressures, while activity indicators remain mixed. For EUR/JPY, however, the sharp appreciation of the Yen and renewed intervention warnings from Tokyo dominate trading on Thursday, pushing European economic data into the background.