**EUR/JPY Cross Dips Near 176.60 Amid BoJ Hawkish Signals and Yen Strength**
The EUR/JPY currency pair is under pressure, trading around 176.60 during the Asian session on Friday. The Japanese Yen (JPY) has strengthened against the Euro, buoyed by the release of the Bank of Japan’s (BoJ) September policy meeting minutes and ongoing verbal intervention from Japanese officials.
**Hawkish BoJ Minutes Boost Yen**
The minutes from the BoJ’s September meeting, released on Wednesday, revealed a more hawkish stance among policymakers. An increasing number of central bank members believe that conditions are aligning for an interest rate hike, with two members even advocating for an immediate increase. This shift in sentiment may provide near-term support for the Yen, as markets anticipate a potential tightening of monetary policy in Japan.
**Japanese Officials Signal Increased FX Monitoring**
Adding to the Yen’s strength are statements from Japan’s Finance Minister, Satsuki Katayama, who last week escalated verbal intervention efforts. Katayama emphasized that officials are “monitoring foreign exchange movements with a high sense of urgency,” indicating the government’s resolve to support the currency and stability in the FX markets.
**ECB’s Cautious Stance Provides Limited Support for EUR**
On the other hand, a cautious approach from the European Central Bank (ECB) may help cap losses for the Euro. ECB President Christine Lagarde stated the central bank is “in a good place” and underlined the ECB’s readiness to act as needed to maintain current conditions. Meanwhile, Governing Council member Boris Vujcic reiterated that policy is “in a good place” after achieving inflation at the bank’s target, and added, “we feel that we have done our job.”
**Outlook: Limited Rate Cuts Priced In**
Market sentiment around potential ECB policy moves remains subdued. Traders currently see less than a 50% chance of further rate reductions by July 2026, according to recent Morningstar analysis. Swap markets are pricing in just a 25 basis point cut by September 2026, reflecting expectations of a steady policy environment in the Eurozone for the foreseeable future.
**Conclusion**
The EUR/JPY is weighed down by strengthening Yen fundamentals and hawkish signals from Japanese policymakers, while support for the Euro is limited by the European Central Bank’s measured stance. FX traders will continue to watch for further developments from both central banks as policy directions become clearer in the coming months.
https://bitcoinethereumnews.com/finance/eur-jpy-loses-traction-to-near-176-50-despite-ecbs-cautious-stance/
