EUR/JPY Stalls as ECB and BoJ Rate Hikes Come into Focus

The euro held steady against the yen on Tuesday as markets digested the contrasting monetary policy outlooks of the European Central Bank and the Bank of Japan. The EUR/JPY cross remained rangebound, with traders weighing the implications of potential rate hikes from both central banks.

The ECB has signaled a possible rate hike in its next meeting, driven by persistent inflation in the eurozone, while the BoJ has hinted at normalizing its ultra-loose monetary policy. This dual tightening scenario creates a complex dynamic for the EUR/JPY pair, with the divergence in policy paths between the two central banks being a key driver.

Traders are closely watching key support and resistance levels for EUR/JPY, with immediate support near 158.00 and resistance around 160.50. A break above this range could signal further upside, while a drop below support might trigger a sell-off.