EUR/JPY Range-Bound as ECB and BoJ Send Mixed Signals

The EUR/JPY exchange rate has been trading in a narrow range as traders weigh contrasting monetary policy signals from the European Central Bank and the Bank of Japan. The eurozone's inflation data remains above the ECB's 2% target, while Japan's core consumer price index has exceeded the BoJ's 2% goal.

Market participants are closely watching comments from ECB officials, who have signaled that interest rates may need to stay higher for longer to combat persistent price pressures. Meanwhile, the BoJ has hinted at possible normalization of its ultra-loose monetary policy.

The yen remains under pressure due to Japan's low interest rates relative to other major economies, but recent hawkish remarks from BoJ Governor Kazuo Ueda have prompted some traders to pare back short-yen bets. The euro has found support from the ECB's data-dependent approach, which has kept the door open for further rate increases if inflation proves sticky.