EUR/JPY Hovers near 178.50 Amid Bearish Bias, Yen Underperforms Ahead of BoJ Decision

The EUR/JPY exchange rate has been hovering around 178.50, remaining within oversold territory according to technical analysis.

This bearish trend is supported by the currency cross's position below both the nine-day and 50-day Exponential Moving Averages (EMAs), indicating that rallies are likely to be sold while price stays capped by these averages.

The 14-day Relative Strength Index (RSI) at 29.84 suggests downside pressure persists but could become stretched on further declines.

Strategists at Scotiabank note that the Yen's underperformance appears to reflect more than just shifting risk appetite, as market participants eye Friday's Bank of Japan decision and its widely anticipated and fully priced hike.