Hawkish expectations from the European Central Bank supported the euro, while the euro/yen pair remained range-bound.
2026-06-12 15:49:54
The euro extended its gains against the yen in European trading on Friday, rising to around 185.40, a daily increase of approximately 0.12%. The euro performed relatively strongly among major currencies, primarily driven by expectations of a hawkish European Central Bank (ECB). As tensions in the Middle East exacerbated energy price volatility, renewed concerns about inflation expectations led investors to reassess the likelihood of further monetary tightening by the ECB.
The European Central Bank (ECB) raised its main interest rate by 25 basis points at its previous monetary policy meeting, stating that short-term inflation expectations had risen. ECB President Christine Lagarde emphasized that the central bank will continue to monitor the magnitude and duration of energy price increases to assess their impact on inflation and the economic outlook. Some institutions predict that after the June rate hike, the ECB may still raise rates again in September to ensure that inflation expectations remain stable.
On the other hand, the yen has been relatively weak overall. The market is awaiting the Bank of Japan's upcoming monetary policy meeting, with investors remaining cautious about the policy outlook. According to previous market surveys, the Bank of Japan is expected to raise interest rates by 25 basis points to 1.00%, but due to Governor Kazuo Ueda's hospitalization for health issues, the meeting will be chaired by a deputy governor. The market is focused on whether the policy statement will release more signals regarding the future path of interest rates.
The divergence in policy expectations between the euro and the yen has become a significant factor driving the EUR/JPY exchange rate higher. The European Central Bank remains vigilant about inflation risks, while the Bank of Japan, although potentially raising interest rates, is maintaining a cautious pace of policy adjustments. Therefore, against the backdrop of a sustained European interest rate advantage, the euro/yen exchange rate will continue to receive short-term support.
However, investors still need to pay attention to changes in energy prices, developments in the Middle East, and the outcome of the Bank of Japan's meeting. If the Bank of Japan releases an unexpectedly hawkish signal, or if market risk aversion intensifies significantly, the yen may regain buying interest, thus limiting further upside potential for the euro against the yen.
From a daily chart perspective, the EUR/JPY pair maintains a clear upward trend, with the price consistently trading above major moving averages, indicating a solid medium- to long-term bullish structure. Currently, the exchange rate is approaching previous highs. A decisive break above the key resistance level of 186.00 could open up further upside potential, with targets at 186.80 and 188.00. On the downside, support levels to watch are 184.50 and 183.50; a break below these levels could indicate weakening short-term upward momentum.
From a 4-hour chart perspective, the EUR/JPY pair maintains a slightly bullish short-term trend, moving along a short-term upward channel with positive market momentum. However, given that the exchange rate is already at a relatively high level, there is some short-term profit-taking potential. If the price can stabilize above 185.00, the bulls still have a chance to challenge the 186.00 resistance level; if it breaks below the 184.50 support level, it may enter a deeper correction and further test the support around 183.50.
Editor's Summary : The European Central Bank's vigilance regarding inflation risks and market expectations of further interest rate hikes have been the core drivers behind the recent rise in the euro against the yen. Meanwhile, market caution ahead of the Bank of Japan's meeting has put short-term pressure on the yen. Overall, EUR/JPY remains in a relatively strong phase, but as the price approaches a key resistance area, the outcome of the Bank of Japan's policy and changes in global risk sentiment will determine whether the exchange rate can further reach new highs.
The European Central Bank (ECB) raised its main interest rate by 25 basis points at its previous monetary policy meeting, stating that short-term inflation expectations had risen. ECB President Christine Lagarde emphasized that the central bank will continue to monitor the magnitude and duration of energy price increases to assess their impact on inflation and the economic outlook. Some institutions predict that after the June rate hike, the ECB may still raise rates again in September to ensure that inflation expectations remain stable.
On the other hand, the yen has been relatively weak overall. The market is awaiting the Bank of Japan's upcoming monetary policy meeting, with investors remaining cautious about the policy outlook. According to previous market surveys, the Bank of Japan is expected to raise interest rates by 25 basis points to 1.00%, but due to Governor Kazuo Ueda's hospitalization for health issues, the meeting will be chaired by a deputy governor. The market is focused on whether the policy statement will release more signals regarding the future path of interest rates.
The divergence in policy expectations between the euro and the yen has become a significant factor driving the EUR/JPY exchange rate higher. The European Central Bank remains vigilant about inflation risks, while the Bank of Japan, although potentially raising interest rates, is maintaining a cautious pace of policy adjustments. Therefore, against the backdrop of a sustained European interest rate advantage, the euro/yen exchange rate will continue to receive short-term support.
However, investors still need to pay attention to changes in energy prices, developments in the Middle East, and the outcome of the Bank of Japan's meeting. If the Bank of Japan releases an unexpectedly hawkish signal, or if market risk aversion intensifies significantly, the yen may regain buying interest, thus limiting further upside potential for the euro against the yen.
From a daily chart perspective, the EUR/JPY pair maintains a clear upward trend, with the price consistently trading above major moving averages, indicating a solid medium- to long-term bullish structure. Currently, the exchange rate is approaching previous highs. A decisive break above the key resistance level of 186.00 could open up further upside potential, with targets at 186.80 and 188.00. On the downside, support levels to watch are 184.50 and 183.50; a break below these levels could indicate weakening short-term upward momentum.
From a 4-hour chart perspective, the EUR/JPY pair maintains a slightly bullish short-term trend, moving along a short-term upward channel with positive market momentum. However, given that the exchange rate is already at a relatively high level, there is some short-term profit-taking potential. If the price can stabilize above 185.00, the bulls still have a chance to challenge the 186.00 resistance level; if it breaks below the 184.50 support level, it may enter a deeper correction and further test the support around 183.50.
Editor's Summary : The European Central Bank's vigilance regarding inflation risks and market expectations of further interest rate hikes have been the core drivers behind the recent rise in the euro against the yen. Meanwhile, market caution ahead of the Bank of Japan's meeting has put short-term pressure on the yen. Overall, EUR/JPY remains in a relatively strong phase, but as the price approaches a key resistance area, the outcome of the Bank of Japan's policy and changes in global risk sentiment will determine whether the exchange rate can further reach new highs.
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