- The Euro rebounds from 177.85 to near 178.85 but is still 0.3% down against the Japanese Yen.
- Both the ECB and the BoJ are expected to hike interest rates in their upcoming policy meetings.
- Market experts warn that moderate Eurozone growth could cloud the ECB’s tightening path.
The Euro (EUR) claws back some of its early losses against the Japanese Yen (JPY) during the European trading session on Tuesday. At press time, EUR/JPY is down 0.3% to near 178.85 even after recovering from its intraday low of 177.85.
Japanese Yen Price Today
The table below shows the percentage change of Japanese Yen (JPY) against listed major currencies today. Japanese Yen was the strongest against the New Zealand Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.06% | 0.04% | -0.34% | -0.16% | 0.06% | 0.51% | 0.14% | |
| EUR | -0.06% | -0.03% | -0.39% | -0.21% | 0.02% | 0.50% | 0.07% | |
| GBP | -0.04% | 0.03% | -0.40% | -0.19% | 0.00% | 0.49% | 0.11% | |
| JPY | 0.34% | 0.39% | 0.40% | 0.21% | 0.42% | 0.88% | 0.51% | |
| CAD | 0.16% | 0.21% | 0.19% | -0.21% | 0.21% | 0.67% | 0.31% | |
| AUD | -0.06% | -0.02% | -0.01% | -0.42% | -0.21% | 0.47% | 0.10% | |
| NZD | -0.51% | -0.50% | -0.49% | -0.88% | -0.67% | -0.47% | -0.37% | |
| CHF | -0.14% | -0.07% | -0.11% | -0.51% | -0.31% | -0.10% | 0.37% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Japanese Yen from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent JPY (base)/USD (quote).
The outlook of the pair remains bearish as market experts see a strong Japanese Yen’s outlook amid expectations that the Bank of Japan (BoJ) will extend its monetary tightening cycle even after hiking interest rates at the policy meeting next week.
Yen support builds as markets price rapid BoJ tightening
Analysts at Commerzbank highlight that “an interest rate hike next week is now priced in at roughly 96%, and the market expects further hikes to follow quickly thereafter,” underscoring how swiftly expectations have shifted.
In Commerzbank’s view, “as long as expectations continue to shift in such a hawkish direction, the yen should have little trouble appreciating further,” with the currency seen as well positioned to benefit from this increasingly aggressive policy path.
On the Euro front, financial markets keenly await the European Central Bank’s (ECB) interest rate decision on Thursday. Experts seem confident that the ECB will hike interest rates in the policy meeting, but warn that moderate Eurozone economic growth and higher energy prices would complicate the central bank’s monetary policy path.
According to ABN Amro, “for now, the path for the ECB is clear, and a rate hike at next Thursday’s Governing Council meeting is fully priced by financial markets.” However, they stress that “less clear now is what comes after,” setting out a baseline in which “the ECB” is expected to keep “rates on hold for the remainder of the year, and even cut rates in Q2-Q3 next year.”
Strategists at OCBC have highlighted that “higher energy prices have complicated the outlook for the ECB’s tightening cycle,” noting that inflation risks are “becoming less comfortable against a backdrop of only moderate growth.”
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