EUR/JPY and GBP/JPY fell below the lower bounds of the forecast ranges for the previous week, with expectations of additional ECB rate hikes and a Bank of Japan rate hike being closely watched as market drivers. At the same time, the BoE's policy developments and next week's economic data are also in focus.
EUR/JPY and GBP/JPY fell below the lower bounds of the forecast ranges for the previous week. EUR/JPY temporarily fell as low as ¥177.85, while GBP/JPY dropped to ¥207.09. They have since recovered to the ¥179 and ¥208 ranges, respectively.
On the 10th, the ECB raised its policy rate by 0.25 percentage points, lifting the central bank deposit rate to 2.50%, and revised its outlook for 2027 and 2028 upward. Market views are divided between continued rate hikes and a pause, leaving the pace of future hikes uncertain.
The BoE is said to face a gap between market expectations for rate hikes and the actual pace of policy tightening. Its outlook is expected to be influenced by next week's BoE meeting and the employment data and CPI, while attention is also focused on the yen's reaction following the Bank of Japan's meeting.
Technical analysis of EUR/JPY shows that its daily 25-day moving average stands at ¥183.47 and its 100-day moving average at ¥184.57, indicating persistent resistance on the upside. The RSI has fallen to 28.5, prompting some to point to the possibility that the pair is oversold in the short term.