EUR/JPY Rebounds from Multi‑Month Lows Amid Stalled US Yield Growth
The euro‑yen pair, which had been languishing near the 180‑level, has begun to claw back a portion of the losses accrued during the past month. Technical observers note that the recovery is closely linked to a sudden dip in U.S. natural‑gas futures, which has eased the pressure on the Dow and, by extension, on the currency markets.
U.S. Yields Stay Stubborn
Despite the brief reprieve that followed the Federal Reserve’s recent rate decision, the 10‑year Treasury yield has once again climbed back to the 5‑percent mark. Multiple European market reports underline that this persistence in high yields is eroding the euro’s appeal as a safe‑haven currency. As long as the yield curve remains steep, the yen—historically the go‑to risk‑off asset—will continue to attract capital, reinforcing a bullish stance on the pair.
Technical Analysis Supports a Short‑Term Upswing
Recent daily charts show that EUR/JPY has recovered from the multi‑month low of 180.158, the most recent closing price recorded on 2026‑09‑17. Analysts from DailyFX point out that the pair is testing a key resistance zone near 182, a level that, if breached, could signal a further rally toward the 184‑mark that has been the 52‑week high (187.935). Conversely, the 52‑week low of 172.269 remains a critical floor, suggesting that a prolonged decline is still averted.
Citi’s Outlook: A Possible Drop Below ¥175
Citi’s recent research note, dated 2026‑09‑18, cautions that the euro‑yen might slip below 175 yen in the near term. This projection is based on a combination of tightening U.S. monetary policy, a persistent 5‑percent Treasury yield, and the yen’s role as a safe‑haven under current market stress. While a short‑term rebound is possible—especially if natural gas futures continue to fall—Citi remains skeptical of a sustained upside in the absence of a clear shift in U.S. policy.
Market Sentiment and Oil Prices
European stock markets, which have suffered heavy losses throughout the day, continue to reflect the broader risk‑off sentiment. Oil prices have also declined, further dampening euro growth prospects. The interdependence between oil and the euro is well‑documented; a fall in Brent crude tends to weigh on the euro, thereby reinforcing the yen’s strength.
Conclusion
The EUR/JPY pair’s recent climb from multi‑month lows is a fragile reprieve, underpinned by transient factors such as declining natural‑gas prices. The looming threat of a 5‑percent Treasury yield, coupled with Citi’s bearish view, signals that the yen will likely maintain its defensive position unless there is a decisive policy shift in the United States. Traders should watch for a decisive break of the 182‑level and keep a close eye on U.S. yield movements, as these will determine whether the euro can sustain any meaningful advance against the yen.
