BoJ Decision Supports EUR/JPY Rebound Amid Stronger Eurozone Inflation

The Bank of Japan's (BoJ) monetary policy decision helped calm markets and support a rebound in the EUR/JPY pair, which had plummeted to near 182.00 on Thursday.

The BoJ kept its short-term interest rate unchanged at 1% after its July policy meeting, as widely expected. The central bank made slight adjustments to its economic forecasts, upgrading its fiscal 2026 real GDP growth forecast to 0.6% and lowering its core Consumer Price Index (CPI) forecast to 2.5%. Board member Hajime Takata was the sole dissenter, arguing in favor of another interest rate hike due to geopolitical tensions.

Japanese Finance Minister Satsuki Katayama reiterated that authorities remain ready to intervene in the foreign exchange market at any time, keeping the risk of further intervention alive. Meanwhile, European Central Bank (ECB) Governing Council member Martin Kocher noted that future monetary policy decisions will remain fully data-dependent.