Euro Holds Firm Against Yen on Weaker Japan GDP and BoJ Hike Bets
The Euro has maintained its strength against the Japanese Yen, trading near 185.20 in early European dealings on Thursday. This comes after Japan released weaker-than-expected Gross Domestic Product (GDP) figures for Q2, which rose 0.3% compared to a prior 0.5% reading and a market consensus of 0.5%. Despite the disappointing data, expectations that the Bank of Japan could lift interest rates as soon as September 2026 are helping to limit the downside for the JPY.
According to Reuters, overnight index swaps currently imply roughly an 80% chance of a rate increase at the BoJ's next policy meeting. This has helped cushion the impact of the weaker GDP figures on the Yen.
The technical picture remains constructive for EUR/JPY, with the pair trading above the 100-day simple moving average and the 20-day Bollinger middle band.