Euro/Japanese‑Yen Market Update
The euro‑yen pair settled at ¥178.10 on 30 October 2025, close to the 52‑week high of ¥178.80 reached on 29 October. The pair has been consolidating near its recent peak as the European Central Bank (ECB) maintains a tight monetary stance and the Japanese yen has weakened under fiscal‑policy concerns.
Key Drivers
| Driver | Impact on EUR/JPY |
|---|---|
| ECB policy stance | The ECB has kept policy rates unchanged, signalling no immediate rate cuts. This stability supports the euro against a weak yen. |
| Japanese fiscal concerns | Rising fiscal deficits and government spending initiatives have eroded confidence in the yen, leading to a sell‑off against major currencies. |
| US market sentiment | Strong earnings from US technology giants Amazon and Apple have buoyed global markets. Although this primarily affects the US dollar, the positive risk‑on environment has indirectly supported the euro. |
| Asia equity performance | Japan’s Nikkei index rallied, reflecting broader market optimism in Japan. However, this has not translated into a durable yen recovery. |
Market Sentiment
- Euro: Investors view the euro as a relative safe‑haven in a context of stable ECB policy. The currency remains under pressure from a stronger dollar but benefits from the yen’s weakness.
- Yen: The yen has weakened to its lowest level since the start of 2025, driven by fiscal uncertainty and a lack of accommodative policy from the Bank of Japan. The currency is currently trading below its 52‑week low of ¥154.81.
Technical Overview
- Support level: ¥170.00 – the 20‑day moving average has acted as a floor in recent sessions.
- Resistance level: ¥180.00 – close to the 52‑week high, presenting a short‑term ceiling.
- Trend: The pair is in a slight downtrend, but the recent consolidation suggests a potential breakout either up or down.
Outlook
The euro‑yen pair is likely to remain near its current range until a significant shift in ECB policy or Japanese fiscal policy occurs. Short‑term volatility may arise from:
- ECB policy announcements or statements from ECB officials regarding inflation risks.
- Bank of Japan statements on future policy direction.
- Global equity market moves, especially those influenced by US technology earnings.
Investors should monitor these catalysts closely to gauge potential shifts in the euro‑yen trajectory.
