JPY

• EUR/JPY rises as the Japanese Yen weakens after mixed Tokyo inflation data.
• Tokyo CPI rose 1.5% YoY in April; core CPI also 1.5%, missing the 1.8% forecast.
• The ECB kept the deposit rate at 2% despite rising Eurozone inflation driven by the Iran conflict.

EUR/JPY gains ground after registering 1.88% losses in the previous day, trading around 184.40 during the Asian hours on Friday. The currency cross advances as the Japanese Yen (JPY) weakens following mixed Tokyo inflation data.

Japan’s Statistics Bureau reported Friday that Tokyo’s headline Consumer Price Index (CPI) rose 1.5% year-over-year (YoY) in April, up from 1.4% prior. Core CPI (excluding fresh food) also increased 1.5% YoY, missing the 1.8% forecast and down from 1.7% previously. Meanwhile, CPI excluding fresh food and energy eased to 1.5% from 1.7%.

The JPY found some support against major peers after suspected intervention by Tokyo, which came hours after officials issued a “final” warning against excessive currency selling. Although the Finance Ministry has not confirmed action, the sharp market move led traders to attribute it to government support. Investors are now weighing the chances of further intervention, as authorities often act in multiple rounds.

Japan’s top FX official, Vice Finance Minister for International Affairs Atsushi Mimura, declined to comment on intervention or crude oil futures, but noted ongoing close communication with the US on currency matters.

The Euro (EUR) also gains support after the European Central Bank (ECB) left interest rates unchanged at its April meeting. The governing council kept the deposit rate at 2% despite rising Eurozone inflation amid the Iran conflict, stating that while the outlook remains broadly unchanged, upside risks to inflation and downside risks to growth have increased.

• EUR/JPY gives back recent gains and comes under pressure around 183.60.
• ECB keeps rates unchanged and highlights rising uncertainty on inflation and growth.
• Japan strengthens its intervention rhetoric, supporting the Japanese Yen.

EUR/JPY declines and trades around 183.60 at the time of writing, after hitting two-week highs above 187.50, amid mixed pressures from European monetary policy and rising intervention risks in Japan.

The European Central Bank (ECB) leaves its key interest rates unchanged at its April meeting, as expected, with the main refinancing rate at 2.15%, the marginal lending facility at 2.4% and the deposit facility at 2%. The central bank notes that incoming data has been broadly in line with its expectations, but warns that upside risks to inflation and downside risks to growth have intensified, particularly due to rising energy prices linked to geopolitical tensions in the Middle East.

The ECB emphasizes a data-dependent, meeting-by-meeting approach and reiterates that it is not pre-committing to any specific rate path. It also highlights that long-term inflation expectations remain well anchored, although short-term expectations have increased significantly.

On the Japanese side, pressure builds on the Japanese Yen (JPY) following firm comments from Finance Minister Satsuki Katayama, who signals that the time for decisive action in the foreign exchange market is approaching. These remarks come as USD/JPY moved above the key 160.00 level, reviving speculation about potential intervention by Japanese authorities to support the currency.

At the same time, rising Oil prices, driven by tensions in the Middle East, weigh on Japan’s economic outlook as a major energy importer, limiting the JPY’s upside despite intervention warnings.

In the Eurozone, macroeconomic data sends mixed signals. Germany’s Gross Domestic Product (GDP) expanded by 0.3% in the first quarter, beating expectations, but the Unemployment Rate rose to 6.4%, pointing to ongoing labor market fragility. Meanwhile, inflation in the Eurozone accelerated, with the Harmonized Index of Consumer Prices (HICP) increasing by 3% YoY in April, above forecasts.

Market focus now shifts to the press conference of ECB President Christine Lagarde for further guidance on the future path of monetary policy.

Euro Price Today

The table below shows the percentage change of Euro (EUR) against listed major currencies today. Euro was the strongest against the US Dollar.

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 Euro from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent EUR (base)/USD (quote).

(This story was corrected at 13:05 GMT to say that EUR/JPY was trading around 183.60, not 186.60)

• EUR/JPY retreats to 186.20 from two-week highs above 187.50, turns negative on the day.
• Japanese Finance Minister Katayama said that “the time for decisive action” is near.
• German GDP beat expectations in Q1, but unemployment rose unexpectedly.

The Euro (EUR) has pulled back form two week highs above 187.50 against the Japanese Yen (JPY) on Thursday, retreating to 186.20 at the time of writing, as Japanese Finance Minister Satsuki Katayama launched a clear intervention warning.

Katayama affirmed on Thursday that the “timing for decisive action is near” and that Japanese authorities are getting closer to stepping into the FX markets. These comments arrive after the USD/JPY crossed the key 160.00 level, considered a line in the sand for Tokyo.

The JPY was showing the weakest performance among the G8 currencies on Thursday. The latest jump in Oil prices and the prospect of an extended blockade in the Strait of Hormuz have reactivated concerns about the consequences for the Crude-importing Japanese economy, offsetting the hawkish tone of the Bank of Japan’s (BoJ) recent monetary policy meeting.

In Europe, German jobless figures in March disappointed. The unemployment rate rose to 6.4%, against the market consensus of a steady 6.3% rate from February. Data from Destatis revealed that the number of jobless workers increased by 20K, exceeding the 4K forecasted by market analysts and keeping the total unemployment figure beyond 3 million.

These figures offset the 0.3% increase of the first quarter’s Gross Domestic Product (GDP), which beat expectations of a slight slowdown to 0.2%, following another 0.3% quarterly gain in the last three months of last year.

In the Eurozone, inflation figures have confirmed the higher inflationary pressures stemming from the Middle East conflict. The Eurozone preliminary Harmonized Index of Consumer Prices (HICP) has risen 1% in April, following a 1.3% increase in March. Moreover, the HICP rose 3% YoY, from 2.6% in March, and exceeded market expectations of 2.9%.

The focus now shifts to the European Central Bank (ECB), which will disclose the outcome of its last monetary policy meeting. The bank is likely to keep its benchmark interest rate on hold, but hint at rate hikes in the near term, pressured by the rising prices.