EUR/JPY Steadies Near 185.70 as Japan Inflation Lifts BoJ Hike Bets

The EUR/JPY currency pair has steadied near the 185.70 level as Japan's National CPI rose to 1.9% year on year in July, from 1.6% in June.

This increase in inflation has lifted bets for a Bank of Japan rate hike in September, with markets now pricing an 82% chance, up from 23% immediately before the last meeting.

The euro is also being supported by expectations for tighter European Central Bank policy, with a 95% probability of a September hike implied by the ECB Watch tool.