EUR JPY

EURJPY Currency pair flag

Latest EUR JPY Analysis and Forecasts

Hesitant: Caught between FOMO rally and second wave worries

Macroeconomic/ geopolitical developments

  • The strong “risk on” phase from mid-May into early June has stalled, and although last week saw a bounce it also produced another stall, to leave a hesitant more cautious tone across global financial markets into latter June.
  • The Federal Reserve in the US has given further support to credit markets over the past week, but this has not been enough to fully reenergise the “risk on” theme.
Fed
  • Moreover, Jerome Powell again gave a somewhat downbeat outlook for US economy into the second half of 2020, in the past week his testimony to Congress.
  • This echoed the statement from mid-June from the Federal Open Market Committee (FOMC), where concerns were voiced about the deeper impact to the US economy from the lockdowns in the wake of the COVID-19 virus.
Covid 19 cases
Apple closes stores
  • There has also been a new coronavirus outbreak in Beijing.
  • European nations and most US States are continuing to relax lockdown rules and restart their economies.
  • The Bank of England added £100 billion to their bond buying program as expected, which saw the Pound slightly lower.

Global financial market developments

  • The robust May-June bull rallies in world share averages have stalled since mid-June (after the FOMC meeting) with most indices unable to retest the mid-June peaks.
  • In the Forex space, the US Dollar remains strong alongside an even stronger Japanese Yen, maintaining safe haven bids with the further easing of the “risk on” theme.
  • The Euro and the Pound Sterling have been the main casualties amongst the major currencies, with notable setbacks against both the greenback and Yen (GBPUSD, GBPJPY, EURUSD and EURJPY lower)
gbpusd chart
eurusd chart
  • In the commodity world, Oil and Copper have pulled back from multi-month peaks, though Oil has tried to push back towards its recent high.

Key this week

  • Central Bank Watch: People’s Bank of China (PBoC) interest rate decision on Monday and the Reserve Bank of New Zealand (RBNZ) meeting and statement on Tuesday.
  • On the macroeconomic data side on Tuesday we get global Markit Flash Purchasing Managers Index (PMI) for Manufacturing, Services and Composite, the German IFO survey is released Wednesday, US Gross Domestic Product (GDP), Personal Consumption Expenditure (PCE) and Durable Goods are posted on Thursday and on Friday we get Japan Consumer Price Index (CPI) and Michigan Consumer Sentiment.
  • Deaths from and new cases of the COVID-19 coronavirus will remain in focus with particular concerns about a second wave in some US States.
DateKey Macroeconomic Events
22/06/20PBoC interest rate decision
23/06/20Global Markit Flash PMI (Manufacturing, Services and Composite)
24/06/20RBNZ meeting and statement; German IFO survey
25/06/20US GDP, PCE and Durable Goods
26/06/20Japan CPI and Michigan Consumer Sentiment

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EUR JPY Currency Converter

Other major currency pairs


BUY - rate is expected to increase, i.e. the first currency gains value against the second currency.
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EUR/JPY – Live and Historical Rates

The EUR/JPY is a pair made up of two major currencies. Interestingly, when paired up like this, they don’t make a major or a commodity pair. The chart above depicts the amount of Japanese Yen needed to purchase a Euro.

The EUR

The EUR is the common currency of 21 countries, which together make up the world’s largest economy, the Eurozone. Introduced in 1999, the Euro has thus far proved to be a success. 327 million people use it, and more are compelled to join by treaty, although enthusiasm for eurozone membership has somewhat subsided since the vulnerabilities of the common currency were laid bare by the 2008 financial crisis. In need of structural reform, the Eurozone and its currency, the EUR are facing an uncertain future. With all that uncertainty though, the EUR is still the world’s second most traded currency as well as its second largest reserve currency.

The JPY

The status of the Japanese Yen as a reserve currency is also quite respectable: it is the 5th largest currency in this regard, and it is among the top traded currencies as well. The financial authority controlling the JPY is the Bank of Japan, which has kept the JPY interest rate low in the post-1990 era. This move has obviously contributed to the stability and strength of the JPY, while turning it into an attractive carry-trade option.

EURJPY Analysis

The largest common trading partner of the Eurozone and Japan is the US. Thus, it’s safe to say that the state of the US economy is always a major factor in the shaping of this pair. As far as economic engines are concerned: Japan is more dependent on manufacturing, while the finance sector makes up a larger part of the economy of the Eurozone.

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