EUR/JPY keeps pushing higher, sitting around 181.20 through Thursday’s Asia session. The Yen just can’t catch a break these days. Traders expect Japan’s new government to roll out a massive spending plan, which likely means local interest rates stay low. The Euro is getting stimulus from it. Traders are keeping an eye on key data stats—especially Germany’s PPI and the Eurozone Consumer Confidence numbers.
Japan Eyes Huge Stimulus, BoJ Stays on the Sidelines
Japan’s gearing up for a huge stimulus—Kyodo News agency says it could top 20 trillion yen, with talk of another 17 trillion in the mix. Goushi Kataoka, a member of the government panel, made it clear that the Bank of Japan is in no rush to hike rates, at least not before March. They want to see what impact all this extra spending brings. For now, policymakers are staying patient, and that’s piling more pressure on the Yen. Sellers are definitely taking notice.
A fresh Reuters poll shows a thin majority of economists expect a rate hike to 0.75% in December, and everyone agrees it’ll happen by the end of Q1. But traders are still wary—no one wants to get caught if officials step in to support the Yen.
Japanese officials aren’t happy about the recent moves in the currency market. Chief Cabinet Secretary Minoru Kihara said the price moves were sudden and heavily tilted one way—yet markets ought to follow real economic conditions. Because of that, action from officials could come at any moment.
ECB Stays Steady, Giving the Euro a Boost
For now, the ECB kept rates unchanged in October. Yet most experts believe they’ll stay put till 2026 – at least unless a major event forces a shift. That steady hand gives the Euro a bit more support. With the Bank of Japan holding back and the government going all-in on spending, it’s hard to see EUR/JPY losing steam anytime soon.
