EUR/JPY and GBP/JPY are expected to see limited upside next week amid rate hike expectations in Europe, Japan and the UK. Developments in the yen and the timing of key indicator releases will determine the direction of trading.
EUR/JPY and GBP/JPY are expected to maintain the previous week's recovery trend next week, although gains are likely to remain limited. The yen, as well as developments in Europe and the UK, will influence trading, while expectations for a Bank of Japan rate hike in September could weigh on the upside.
The forecast range for EUR/JPY next week is ¥184.00–¥187.50. Rather than whether the ECB will raise rates in September, the focus is expected to remain on discussions over the need for additional rate hikes, with indicators such as German CPI and euro-area HICP likely to be key. From a technical perspective, the 100-day moving average and the highs around ¥187 will serve as reference points. Conversely, a break below the ¥184 area could result in a weaker rebound.
The forecast range for GBP/JPY next week is ¥214.00–¥218.50. Expectations for an early BoE rate hike have receded, but they have not disappeared entirely, and some market participants still expect the timing of a rate hike to be pushed back toward 2027. With a shortage of domestic UK catalysts, GBP/JPY is expected to continue moving in tandem with the yen. A break above the highs in the ¥217 area could lead to a test of ¥218.50. Attention will also be needed on developments at the Bank of Japan, the US employment report and comments related to the G20.