EUR/JPY Climbs Above 164.50 as Bulls Dominate Amid Weak JPY and Bullish Risk Sentiment

EUR/JPY Extends Rally Above 164.50 as Japanese Yen Softens Further

The EUR/JPY pair continues to show bullish strength heading into Friday’s European session, advancing toward the mid-164.00s. The move comes after a sharp uptick on Thursday, bringing the cross close to its highest level in over three weeks.

Weaker Japanese Data and Risk Appetite Undermine the Yen

The Japanese Yen (JPY) remains broadly weaker following disappointing domestic data, including the latest release of Household Spending, which declined alongside a continued drop in real wages—now falling for the fourth straight month.

These figures compound concerns about the Bank of Japan’s (BoJ) ability to tighten policy in the near term, especially amid global trade tensions. As a result, the safe-haven JPY is losing appeal, giving the Euro (EUR) room to strengthen further in the EUR/JPY cross.

Technical Analysis: Bulls Hold Momentum Above 200-Day SMA

Technically, EUR/JPY has recently bounced off the 200-day Simple Moving Average (SMA), failing to break lower in previous sessions and subsequently pushing higher. Daily momentum indicators remain in supportive territory and are not yet overbought, suggesting more room for upside.

The path of least resistance for EUR/JPY appears tilted to the upside, with potential targets aligning above current resistance zones.

What’s Next for EUR/JPY?

• As long as risk appetite remains elevated and BoJ policy normalization remains unlikely, the EUR/JPY pair could test 165.00 and above in the coming days.
• Forex traders should monitor upcoming Eurozone data and central bank commentary for additional catalysts.

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• JPY Weakness: What's Driving It in 2025?
• Bank of Japan Interest Rate Outlook
• Top Forex Technical Setups This Week