EUR/JPY Holds Support at 165.00 Amid Safe-Haven Yen Demand

EUR/JPY Holds Above 165.00 After Geopolitical-Driven Drop

EUR/JPY staged a mild rebound near the 165.00 level during late Asian trading on Friday, following a significant morning sell-off. The move comes amid heightened geopolitical tensions, particularly between Israel and Iran, which sparked broad-based safe-haven demand for the Japanese Yen (JPY).

Yen Demand Rises as Israel-Iran Conflict Escalates

In a sharp escalation, Israel launched airstrikes on multiple military and nuclear sites near Karaj, Iran, early Friday. The strikes reportedly targeted facilities linked to Iran’s nuclear weapons development. Israeli Prime Minister Benjamin Netanyahu confirmed the operation, stating that it may "last for many days," underlining the possibility of prolonged conflict.

Meanwhile, US President Donald Trump reaffirmed his administration’s stance, saying Iran “cannot have a nuclear bomb,” while expressing hopes for a peaceful resolution. These developments drove investors to seek refuge in traditional safe-haven assets like the Japanese Yen.

Support: 165.00
Resistance: 166.20, followed by 167.00

Focus Shifts to Upcoming BoJ Policy Meeting

Looking ahead, the Bank of Japan (BoJ) is set to release its monetary policy report on Tuesday, which could further sway the JPY. While no rate change is expected, markets are watching closely for guidance on inflation, yield curve control, and potential FX interventions, especially amid JPY strength.

Related: USD/JPY Drops to 155.00 as Safe-Haven Flows Boost Yen

Outlook

EUR/JPY remains vulnerable in the short term as risk-off sentiment dominates global markets. However, any dovish surprise from the BoJ or easing of geopolitical risks may limit further Yen appreciation and offer the EUR/JPY pair some recovery scope.