EUR/JPY: Buy or sell?
ScoreThe EUR/JPY, a prominent cross-currency pair on the foreign exchange market, is closely watched by investors for its sensitivity to global economic trends. Currently trading around ¥171.137, the pair has shown significant activity, recently reaching 12-month highs above ¥172, highlighting its dynamic nature.
Forecasts for EUR/JPY:
- 1-Month Forecast: Correction expected, with a range of ¥161.20 – ¥164.80.
- 3-Month Forecast: Continued downward pressure towards a range of ¥159.80 – ¥163.90.
- End of 2025 Forecast: A rebound is anticipated, with a consensus range of ¥168.00 – ¥175.00.
- Long-Term Forecast: A structural upward trend is expected to resume, targeting ¥182.56 by 2029.
The EUR/JPY pair is currently valued at approximately ¥171.137. Its recent ascent to 12-month highs has been primarily driven by the stark contrast in monetary policy between the European Central Bank and the Bank of Japan. However, technical indicators now suggest the rally may be overextended, with a strong signal for a short-term correction. According to our analysis, while the long-term outlook remains positive due to the favourable interest rate differential for the euro, a near-term pullback could present a different strategic window. A potential retracement towards the ¥162.00 support level is a key area to watch before the primary uptrend potentially resumes, with a medium-term objective around the ¥175.00 resistance mark.
The Essentials to Know about EUR/JPY
The core driver for the pair is the significant interest rate gap between the European Central Bank (ECB) and the Bank of Japan (BoJ). With a differential of around 1.5% favouring the euro, this encourages "carry trade" strategies, supporting the euro's value against the yen.
While the Eurozone's core inflation sits at 1.0%, optimistic market sentiment has propelled the pair higher. However, this optimism is tempered by the yen's recent strength against the US dollar and signs of market exhaustion after reaching record levels.
Despite the bullish fundamental backdrop, current technical indicators are flashing strong sell signals, suggesting an imminent correction. Traders are closely monitoring key support levels at ¥170.00 and ¥168.00, as a break below these could confirm a deeper short-term retracement.
- ✅High liquidity with over $3.2 billion in daily volume.
- ✅Significant volatility offering frequent trading opportunities for traders.
- ✅Clear fundamental driver via the ECB-BoJ interest rate differential.
- ✅Strong reactivity to central bank news provides clear catalysts.
- ✅Widely available on all major forex trading platforms.
- ❌Current technical indicators suggest a risk of a sharp pullback.
- ❌High sensitivity to shifts in global risk appetite.
Score- ✅High liquidity with over $3.2 billion in daily volume.
- ✅Significant volatility offering frequent trading opportunities for traders.
- ✅Clear fundamental driver via the ECB-BoJ interest rate differential.
- ✅Strong reactivity to central bank news provides clear catalysts.
- ✅Widely available on all major forex trading platforms.
EUR/JPY: Buy or sell?
- ✅High liquidity with over $3.2 billion in daily volume.
- ✅Significant volatility offering frequent trading opportunities for traders.
- ✅Clear fundamental driver via the ECB-BoJ interest rate differential.
- ✅Strong reactivity to central bank news provides clear catalysts.
- ✅Widely available on all major forex trading platforms.
- ❌Current technical indicators suggest a risk of a sharp pullback.
- ❌High sensitivity to shifts in global risk appetite.
Score- ✅High liquidity with over $3.2 billion in daily volume.
- ✅Significant volatility offering frequent trading opportunities for traders.
- ✅Clear fundamental driver via the ECB-BoJ interest rate differential.
- ✅Strong reactivity to central bank news provides clear catalysts.
- ✅Widely available on all major forex trading platforms.
- 1-Month Forecast: Correction expected, with a range of ¥161.20 – ¥164.80.
- 3-Month Forecast: Continued downward pressure towards a range of ¥159.80 – ¥163.90.
- End of 2025 Forecast: A rebound is anticipated, with a consensus range of ¥168.00 – ¥175.00.
- Long-Term Forecast: A structural upward trend is expected to resume, targeting ¥182.56 by 2029.
- EUR/JPY in brief
- EUR/JPY Rate: Evolution and Real-Time Chart
- EUR/JPY Forecast: Should you invest in this currency pair?
- Trading Profile: How to Trade the Pair Effectively?
- Our 10 Tips for Successfully Trading EUR/JPY
- How to trade the EUR/JPY pair?
- The Latest News on the Pair
- FAQ
Why trust Hellosafe?
At HelloSafe, our expert has been monitoring the EUR/JPY pair for over three years. Every month, hundreds of thousands of users in France trust us to analyze market trends and identify the best investment opportunities. Our analyses are published for informational purposes only and do not constitute investment advice.
EUR/JPY in brief
| 📛 Pair Name | EUR/JPY |
|---|---|
| 🗂️ Pair Type | Minor / Cross-Currency Pair |
| 🌍 Concerned Regions | Eurozone / Japan |
| 💶 Base Currency | Euro (EUR) |
| 💵 Quote Currency | Japanese Yen (JPY) |
| 📊 1-Month Variation | +3.79% |
| 📉 Average Volatility (30-day) | 0.42% |
| 📈 12-Month High | 175.95 |
| 📉 12-Month Low | 154.40 |
| 💹 Current Rate | 171.137 (as of July 10, 2025) |
EUR/JPY Rate: Evolution and Real-Time Chart
The EUR/JPY exchange rate is a crucial barometer of economic sentiment, reflecting the relative strength of the Eurozone and Japanese economies. As a major cross-currency pair, its movements are driven by a combination of key factors, including the divergent monetary policies of the European Central Bank (ECB) and the Bank of Japan (BoJ), inflation and growth data from both regions, and shifts in global risk appetite. Because the BoJ has historically maintained ultra-low interest rates while the ECB has adopted a more conventional policy, the pair is often a focus for carry-trade strategies, making it sensitive to changes in investor confidence and interest rate differentials.
| Period | Approximate Price Level | Variation (%) |
|---|---|---|
| 1 Week | ¥171.14 | +1.09% |
| 1 Month | ¥171.14 | +3.79% |
| Since January 1 | ¥171.14 | +5.07% |
| Over 12 Months | High: ¥175.95 / Low: ¥154.40 | -1.91% |
The pair is known for its significant price swings, with an average daily volatility that can often exceed 100 pips over the last 30 days. For active traders, this high volatility presents both opportunities for profit and heightened risk. The wide daily ranges require disciplined risk management, including the use of stop-loss orders, to protect capital from sudden adverse movements. This characteristic makes EUR/JPY a popular choice for traders who seek momentum and are comfortable navigating dynamic market conditions.
Recently, the EUR/JPY has been in a strong uptrend, reaching a 12-month high above the ¥172.00 level. This rally has been primarily fuelled by the wide interest rate differential between the Eurozone and Japan. However, the pair is now showing signs of technical exhaustion as it encounters significant resistance. Short-term indicators are pointing to a potential pullback or consolidation period after the prolonged advance. While the underlying fundamental support for a strong Euro relative to the Yen remains, traders are closely watching for a potential retest of key support levels, such as ¥170.00.
EUR/JPY Forecast: Should you invest in this currency pair?
In mid-2025, the EUR/JPY cross finds itself at a critical juncture, defined by a stark divergence in monetary policy between the Eurozone and Japan. After a strong upward trend that saw the pair reach multi-year highs above ¥172, recent volatility has increased as traders weigh the prospect of interest rate cuts from the European Central Bank against the Bank of Japan's persistently accommodative stance. This environment creates a compelling but uncertain landscape for the currency pair, balancing a strong fundamental driver against signs of technical exhaustion.
Fundamental analysis
The primary driver for the EUR/JPY pair remains the significant interest rate differential between the European Central Bank (ECB) and the Bank of Japan (BoJ). With the ECB's key rate holding above 2% while the BoJ's remains near zero, the "carry trade" — borrowing in low-yielding yen to invest in higher-yielding euro-denominated assets — has been a powerful tailwind for the pair. However, the forward-looking narrative is shifting. Slowing inflation in the Eurozone is increasing market expectations for the ECB to begin a cycle of rate cuts, which could narrow this interest rate gap and reduce the euro's appeal. Conversely, Japan continues to grapple with stimulating its economy, making any significant tightening by the BoJ unlikely in the near term.
Key economic publications to watch:
- ECB and BoJ Monetary Policy Meetings: The statements and press conferences are crucial for clues on future rate paths.
- Inflation Data (CPI): Releases from both the Eurozone and Japan will directly influence central bank decisions.
- GDP and Growth Figures: Comparative economic performance will impact currency strength.
- Tankan Survey (Japan): A key indicator of Japanese business confidence.
Good to know
The EUR/JPY is highly sensitive to global risk sentiment. In "risk-on" environments, when investors are optimistic, the pair tends to rise as capital flows out of the safe-haven yen and into higher-yielding European assets and equities. Consequently, it often shows a positive correlation with major stock indices like the DAX 40 or Euro Stoxx 50.
Technical analysis
The prevailing long-term trend for EUR/JPY is bullish, as confirmed by the price trading above its 200-day moving average. However, on a shorter-term basis, the momentum appears to be waning after the pair was rejected from the key resistance zone around ¥172.35 - ¥173.00.
- Support and Resistance:
- Immediate support is found at the psychological level of ¥170.00. A break below this could open the door to deeper support levels at ¥169.50 and ¥168.00.
- Major resistance sits at the recent highs of ¥172.35 - ¥173.00. A sustained move above this area would be required to signal a continuation of the primary uptrend.
- Technical Indicators:
- The RSI (14) has fallen below the 50 mark, indicating weakening momentum.
- The MACD has crossed below its signal line, generating a bearish signal.
- Shorter-term moving averages (5, 10, 20, 50-day) are all pointing downwards, suggesting a short-term bearish correction is underway.
- Potential Scenarios:
- A bearish scenario would see the price fail to reclaim the ¥172.00 level and break below the ¥170.00 support, triggering a deeper correction towards the 200-day moving average or lower.
- A bullish continuation would require the price to consolidate and build enough strength to decisively break through the ¥173.00 resistance, invalidating the recent bearish signals and resuming the longer-term uptrend.
Trading Profile: How to Trade the Pair Effectively?
The EUR/JPY is a highly popular cross-currency pair, attracting traders with its unique characteristics. As a pairing of two of the world's most traded currencies, it offers excellent liquidity and is readily accessible. Its volatility is often driven by the stark contrast between the economic policies of the European Central Bank (ECB) and the Bank of Japan (BoJ), as well as its sensitivity to global risk sentiment. This makes the EUR/JPY a barometer for risk appetite, creating distinct and tradable trends.
Recommended trading strategy
| Trading Style | Relevance on EUR/JPY | Why ? |
|---|---|---|
| Scalping | High | The pair's high liquidity ensures tight execution, but spreads can be slightly wider than major pairs. Best suited for the most active trading sessions. |
| Day trading | Very high | EUR/JPY is very sensitive to economic data from both the Eurozone and Japan, leading to significant intraday price swings, especially during session overlaps. |
| Swing trading | Very high | The divergent monetary policies between the ECB and BoJ often create strong, multi-day trends, which are ideal for swing trading strategies like the carry trade. |
| Long term | High | Fundamental drivers, such as long-term interest rate differentials and shifts in global economic risk, make this pair suitable for position traders with a longer horizon. |
Maximum volatility hours
The EUR/JPY's activity peaks when both European and Asian markets are simultaneously active, providing the highest liquidity and the most significant price movements.
| Time slot (CET) | Activity level |
|---|---|
| 01:00 - 09:00 | High Driven by the Tokyo session and the release of Japanese economic data. |
| 09:00 - 11:00 | Peak The overlap between the closing of the Asian session and the opening of the European session is the most volatile period. |
| 11:00 - 18:00 | Moderate to High Activity remains strong during the European session, driven by news from the Eurozone. |
| 18:00 - 01:00 | Decreasing Volatility and volume taper off as the European session closes. |
Driven by the Tokyo session and the release of Japanese economic data.
The overlap between the closing of the Asian session and the opening of the European session is the most volatile period.
Activity remains strong during the European session, driven by news from the Eurozone.
Volatility and volume taper off as the European session closes.
Expert tip
For active trading, focus on the European morning, specifically the 09:00 to 11:00 CET window. This overlap of the London and Tokyo sessions typically offers the best combination of high volume, tight spreads, and significant price action.
Liquidity and traded volume
- Market Share: One of the most traded cross-currency pairs globally.
- Average Daily Volume: Consistently high, ensuring deep liquidity for executing large orders with minimal slippage.
- Typical Spreads: Spreads are competitive for a cross-pair, generally ranging from 1 to 3 pips for standard retail accounts, depending on the broker and market conditions.
Recommended leverage and risk management
In Canada, forex trading is regulated by the Canadian Investment Regulatory Organization (CIRO), which sets maximum leverage levels. For cross-currency pairs like EUR/JPY, this is typically around 1:33.
- Beginner: Start with very low leverage, such as 1:5 to 1:10, to limit risk while gaining experience.
- Intermediate: Traders with a proven strategy can consider leverage in the 1:10 to 1:20 range.
- Advanced: Experienced traders may utilize leverage up to the maximum permitted by their broker, but always with strict risk controls in place.
Watch out!
Effective risk management is crucial for survival and profitability in forex trading. Always implement a stop-loss order for every position to define your maximum risk. As a rule, never risk more than 1-2% of your trading capital on a single trade.
Our 10 Tips for Successfully Trading EUR/JPY
| Tip | Why it's important |
|---|---|
| 1. Monitor ECB and BoJ policy | The interest rate differential between the European Central Bank (ECB) and the Bank of Japan (BoJ) is the primary driver. As the report notes, this divergence fuels carry trade strategies. |
| 2. Understand its role as a risk barometer | EUR/JPY is highly sensitive to global risk sentiment. It tends to rise when markets are optimistic ("risk-on") and fall sharply when investors seek safety in the yen ("risk-off"). |
| 3. Track inflation data from both regions | Inflation reports from the Eurozone and Japan are critical as they directly influence the future decisions of the ECB and BoJ, impacting the pair's direction. |
| 4. Be aware of its volatility | This pair can experience significant price swings. Using appropriate position sizing and mandatory stop-loss orders is essential to manage the high volatility and protect your capital. |
| 5. Trade during the London session | The highest liquidity and most significant moves typically occur during the overlap of the Asian and European sessions, particularly around the London open (approx. 3 AM to 5 AM EST). |
| 6. Watch for verbal or physical intervention | Pay close attention to comments from Japanese officials about the yen's weakness. The threat of intervention by the BoJ can cause sudden and sharp reversals in all yen pairs. |
| 7. Use the 200-day moving average as a guide | As a key long-term trend indicator, the 200-day MA can help frame your trades. The report shows the price above it, confirming a long-term bullish bias despite short-term weakness. |
| 8. Follow key psychological and technical levels | The pair respects major round numbers and historical highs/lows. The report identifies key levels like 170.00 (support) and 172.35 (resistance) that act as market turning points. |
| 9. Correlate with European stock indices | EUR/JPY often has a positive correlation with major European stock indices like the DAX. A rising DAX can signal risk-on sentiment, which often supports a higher EUR/JPY. |
| 10. Don't fight the dominant trend | Given the strong fundamental driver of policy divergence, the path of least resistance has been upward. Focus on identifying pullbacks for potential buying opportunities within the larger trend. |
Effective strategies on EUR/JPY
| Strategy | Description | Relevance on EUR/JPY |
|---|---|---|
| Breakout | Entering a trade when the price moves decisively through a key support or resistance level, often after a period of consolidation. | Very relevant. The pair's tendency to form strong trends after central bank meetings means breakouts from key levels like 172.00 can lead to sustained moves. |
| Technical Rebound | Also known as range trading. This involves buying near a strong support level and selling near a firm resistance level within a defined channel. | Effective in periods of consolidation before major news events. The report identifies clear support (170.00) and resistance (172.35) levels where this strategy could be applied. |
| News Trading | Placing trades based on the outcome of high-impact economic announcements, such as ECB or BoJ interest rate decisions and press conferences. | A core strategy for this pair. The market's entire focus is on central bank policy, making their announcements prime catalysts for significant volatility and trading opportunities. |
| Moving Averages (Carry Trade) | Using a combination of moving averages to enter trades in the direction of the dominant trend, which is often driven by the interest rate differential (the carry trade). | Highly effective. The report shows the price is above its 200-day MA, confirming a long-term uptrend. Traders often use pullbacks to a shorter-term MA (like the 50-day) as entry points to join the trend. |
Backtests and historical behaviors
The EUR/JPY is known for its capacity to enter into long, sustained trends. Its historical variation zone is wide, as evidenced by the 52-week range of 154.40 to 175.95—a move of over 2,100 pips that underscores its trending nature. The pair's seasonality is less about specific calendar months and more about cycles in global risk appetite and, most importantly, the monetary policy divergence between the ECB and BoJ. When this divergence is clear and widening, the pair's average monthly performance can be consistently positive for many months in a row, as seen in the recent +3.79% monthly gain. The most volatile days are invariably linked to central bank events—days featuring ECB or BoJ meetings and press conferences, as well as the release of key inflation data from either region.
How to trade the EUR/JPY pair?
| Step | Description |
|---|---|
| Choose a reliable broker | Select a broker regulated by the Canadian Investment Regulatory Organization (CIRO). Compare brokers based on their spreads for the EUR/JPY pair, execution speed, and the quality of their trading platform to ensure a secure and cost-effective trading environment. |
| Understand the fundamentals | Follow the monetary policies of the European Central Bank (ECB) and the Bank of Japan (BoJ). The interest rate differential between the two is a key driver for EUR/JPY, making it popular for carry trade strategies. Monitor key economic data such as inflation, GDP, and employment figures from both regions. |
| Analyze the charts | Use technical analysis to identify trends and potential entry/exit points. Key tools include identifying support and resistance levels, drawing trend lines, and using indicators like the Relative Strength Index (RSI) to spot overbought/oversold conditions and the MACD to gauge momentum. |
| Define your trading strategy | Choose a strategy that suits your style and the pair's behaviour. Common strategies for EUR/JPY include trend-following (capturing long-term moves driven by policy divergence), breakout trading (entering when the price breaks a key level), or swing trading based on technical patterns. |
| Place your orders and manage risk | Always use a stop-loss order to define your maximum acceptable loss on a trade. Apply sound money management by risking only a small percentage (e.g., 1-2%) of your trading capital per position. Use take-profit orders to secure gains when your price target is met. |
| Monitor your positions and adjust if necessary | Actively track your open trades, especially around major economic announcements from the Eurozone or Japan. Be prepared to adjust your stop-loss to break-even or take partial profits as the trade moves in your favour. Continuously re-evaluate your analysis as new market information becomes available. |
The Latest News on the Pair
On July 8, 2025, a general "risk-off" sentiment swept through global markets amid renewed geopolitical tensions. As a traditional safe-haven currency, the Japanese Yen strengthened significantly against its peers. Consequently, the EUR/JPY pair experienced a sharp decline, breaking below the key psychological support at ¥171.00 and reaching a daily low near ¥170.80 as investors liquidated riskier positions.
On July 2, 2025, Bank of Japan Governor Ueda reiterated the central bank's commitment to maintaining its ultra-accommodative monetary policy, stating that the conditions for a policy shift were not yet met. This affirmation of the wide policy divergence with the European Central Bank immediately weakened the Yen. In response, the EUR/JPY pair rallied, recovering from its earlier losses and climbing back towards the ¥172.00 resistance level.
On June 27, 2025, the European Central Bank concluded its policy meeting by holding its main refinancing rate at 2.15%. However, the accompanying statement adopted a more dovish tone, explicitly acknowledging slowing inflation and opening the door for a rate cut later in the year. This forward guidance put pressure on the Euro, causing the EUR/JPY to retreat from its multi-month highs and test support at the ¥171.50 level.
On June 18, 2025, the flash Harmonised Index of Consumer Prices (HICP) for the Eurozone was released, showing core inflation had slowed to 1.0% year-over-year, below market forecasts. The weaker-than-expected inflation data solidified expectations for a more dovish ECB, weakening the Euro. As a result, the EUR/JPY pair fell sharply following the release, dropping from above ¥172.00 to find stability around the ¥171.35 mark.
FAQ
What is the current trend of EUR/JPY?
The long-term trend for EUR/JPY has been bullish, largely driven by the monetary policy divergence between the European Central Bank and the Bank of Japan. The pair recently traded near its 12-month high above ¥172.00, confirming this underlying strength. However, in the short term, technical indicators suggest a bearish correction is underway, with the price pulling back from its recent peaks. Key levels to watch are the support around ¥170.00 and resistance near ¥172.35.
Is it a good time to buy EUR/JPY?
This depends on your trading profile and risk tolerance. While the fundamental backdrop of interest rate differentials still favors long-term buyers, current technical signals point towards a short-term pullback. A patient trader might wait for a retracement to a major support level, like ¥170.00, to look for buying opportunities. Conversely, a decisive breakout above the ¥172.35 resistance could signal a continuation of the uptrend for momentum traders, though market uncertainty remains high.
Can you trade EUR/JPY with a small capital?
Yes, trading EUR/JPY is accessible even with a small capital. As a major cross-currency pair, it offers high liquidity, which typically translates to tighter spreads and lower transaction costs. Regulated brokers in Canada also provide leverage, allowing you to control a larger position with less initial capital. However, it's crucial to practice strict risk management by using stop-losses and risking only a small percentage of your account on each trade to protect your capital from the pair's volatility.
What are the best times to trade EUR/JPY?
The best trading hours are during session overlaps when both liquidity and volatility are at their peak. The most active period is the London and New York session overlap, roughly from 8 AM to 12 PM EST, as this is when most Euro-related news is digested. The earlier Asian and London session overlap, from about 3 AM to 7 AM EST, is also a prime time for movement. Trading during these windows generally offers better pricing and more opportunities.
What strategy works best on this pair?
Strategies that capitalize on its distinct characteristics work well. Breakout strategies are effective following key central bank announcements, which can initiate strong directional moves. During quieter periods, trading technical rebounds between well-defined support and resistance levels can be profitable. For longer-term moves, trend-following strategies using moving averages (like the 50-day and 200-day) are ideal for capturing trends driven by monetary policy. Indicators like the RSI and chart patterns help time entries for these strategies.
What is the current trend of EUR/JPY?
The long-term trend for EUR/JPY has been bullish, largely driven by the monetary policy divergence between the European Central Bank and the Bank of Japan. The pair recently traded near its 12-month high above ¥172.00, confirming this underlying strength. However, in the short term, technical indicators suggest a bearish correction is underway, with the price pulling back from its recent peaks. Key levels to watch are the support around ¥170.00 and resistance near ¥172.35.
Is it a good time to buy EUR/JPY?
This depends on your trading profile and risk tolerance. While the fundamental backdrop of interest rate differentials still favors long-term buyers, current technical signals point towards a short-term pullback. A patient trader might wait for a retracement to a major support level, like ¥170.00, to look for buying opportunities. Conversely, a decisive breakout above the ¥172.35 resistance could signal a continuation of the uptrend for momentum traders, though market uncertainty remains high.
Can you trade EUR/JPY with a small capital?
Yes, trading EUR/JPY is accessible even with a small capital. As a major cross-currency pair, it offers high liquidity, which typically translates to tighter spreads and lower transaction costs. Regulated brokers in Canada also provide leverage, allowing you to control a larger position with less initial capital. However, it's crucial to practice strict risk management by using stop-losses and risking only a small percentage of your account on each trade to protect your capital from the pair's volatility.
What are the best times to trade EUR/JPY?
The best trading hours are during session overlaps when both liquidity and volatility are at their peak. The most active period is the London and New York session overlap, roughly from 8 AM to 12 PM EST, as this is when most Euro-related news is digested. The earlier Asian and London session overlap, from about 3 AM to 7 AM EST, is also a prime time for movement. Trading during these windows generally offers better pricing and more opportunities.
What strategy works best on this pair?
Strategies that capitalize on its distinct characteristics work well. Breakout strategies are effective following key central bank announcements, which can initiate strong directional moves. During quieter periods, trading technical rebounds between well-defined support and resistance levels can be profitable. For longer-term moves, trend-following strategies using moving averages (like the 50-day and 200-day) are ideal for capturing trends driven by monetary policy. Indicators like the RSI and chart patterns help time entries for these strategies.
