What is the EUR/JPY currency pair?
The EUR/JPY pair says how many Japanese yen one euro costs.
EUR/JPY is one of the most traded cross pairs without the US dollar, and it
reacts especially strongly to the rate gap between the ECB and the Bank of
Japan.
A cross pair is a currency pair without the US dollar. EUR/JPY connects two of
the world’s most important reserve currencies. When the price rises, the euro
gets stronger against the yen. When it falls, the yen gains value. For traders
the pair is interesting because it often forms clear trends and reacts strongly
to rate decisions.
The other side of the yen shows in USD/JPY.
Anyone trading EUR/JPY keeps an eye on that pair, because moves in dollar-yen
often carry over into euro-yen. That way, yen-specific impulses can be separated
from pure euro moves.
What moves the EUR/JPY rate
The exchange rate depends on a few strong drivers. These are the ones to watch:
- The rate gap between the ECB and the Bank of Japan: the
ECB deposit rate has been 2.50% since
10 September 2026, after 2.25% from 11 June. The
Bank of Japan’s policy rate has been
1.00% since 16 June 2026. The yield advantage therefore still lies with
the euro, but the distance is shrinking.
- Japan’s turn in monetary policy: the Bank of Japan is raising rates more
clearly than at any time since the 1990s. That tends to support the yen and
slows its long weakness.
- The carry trade: many investors borrow cheaply in yen and invest the money
in higher-yielding currencies. This carry trade weighs on the yen as long as
the rate gap stays wide.
- Currency intervention: Japan’s authorities watch a weak yen closely and
have intervened in the currency market in the past. That is the biggest
short-term risk for falling EUR/JPY prices.
- Risk appetite: in a crisis the yen counts as a safe currency. When
uncertainty rises, the yen can appreciate quickly and weigh on EUR/JPY.
- Growth and inflation: data from the euro area and Japan shift rate
expectations and with them the price.
For a fuller view of the euro’s strength, the
EUR/USD forecast is worth reading alongside
this page, because that pair is the leading indicator for the euro.
Technical ratings
A compact overview of the technical situation is available on
TradingView. The
summary there bundles the most popular indicators, such as moving averages,
oscillators and pivots. For the long-term view, choose the “1 month” time frame.
Technical ratings are a tool, not an autopilot. They combine many single
indicators into one signal and make a quick overview easier. A trading decision
on that basis alone does not replace your own analysis. The ratings only show
that certain conditions of a set of indicators are met, conditions that may or
may not fit your strategy.
Conclusion: the uptrend is intact, but counterforces are growing
The chart picture stays pointed upward. Across all three time frames,
EUR/JPY shows an intact trend structure. As long as the pair trades above the
175 yen area and the 20-month line, the way toward 190 and 200 yen stays open.
The fundamental situation, however, is becoming double-edged. With the Bank
of Japan’s turn in rates, the yen loses part of its structural disadvantage. A
determined rate rise or a currency intervention can interrupt the uptrend at any
time. Christian Möhrer weights the chart arguments more heavily, but keeps a
close eye on the central bank dates.
A forecast stays a statement of probability, not a guarantee. In currencies
especially, single news items can turn the price quickly. Anyone trading EUR/JPY
uses the levels named here as orientation and limits the risk with clear stops.
Frequently asked questions
Will the yen rise again?
A rising yen is possible, but not guaranteed. The yen appreciates mainly
when the Bank of Japan raises rates further or when risk aversion in the markets
increases. Both shrink the euro’s advantage. At the moment, though, the upward
forces in EUR/JPY still have the upper hand in the chart.
Will the yen keep falling?
The structural pressure on the yen is easing, but it has not disappeared. As
long as the rate gap between the ECB and the Bank of Japan favours the euro, the
yen stays vulnerable. With every further rate rise in Japan, that disadvantage
shrinks.
Why is the yen falling so hard?
The main reason is Japan’s years of low interest rates. While other central
banks raised rates, the Bank of Japan kept them extremely low. Investors pulled
capital out of the yen and used it as a cheap funding currency in the carry
trade. That weakened the yen over years.
How is the yen developing against the euro?
Answered in an earlier update, when the pair stood near 184 yen in the middle of
June 2026. The yen is historically weak against the euro. EUR/JPY trades
near its multi-year highs. Whether the weakness continues depends above all on
the pace of the turn in rates in Japan. The chart sections above are newer, from
21 August, with the pair at 185.63.
Will the EUR/JPY rate rise or fall?
In chart terms the arguments favour rising prices. The uptrend is intact
across all time frames, and the targets are 190 to 200 yen. Fundamentally,
however, the Bank of Japan’s turn in rates increases the risk of setbacks. There
is never a clear direction, only probabilities.
How do ECB and BoJ decisions influence the rate?
The rate gap is the most important driver. Higher rates in the euro area
make the euro more attractive and support EUR/JPY. If the Bank of Japan raises
instead, the yen gains ground. Exactly this interplay sets the medium-term
direction.
Why is the yen seen as a safe currency?
Japan is a large net creditor to the rest of the world. In times of crisis,
Japanese investors bring capital home and international investors look to the
yen as a refuge. These flows often make the yen appreciate exactly when risk
aversion rises.
This forecast is translated from the German edition on kagels-trading.de.
How our forecasts are made and reviewed: How we work.
