EUR/JPY weakens below 184.00 as BoJ signals further tightening

EUR/JPY weakens to near 183.80 in Monday’s early European session.
BoJ policymakers debated the need for more rate hikes even after the December move.
Expectations that the current cycle of ECB interest
rate cuts is coming to an end might cap the EUR’s downside.

The EUR/JPY cross attracts some sellers to around 183.80 during the early European session on Monday. The Japanese Yen (JPY) strengthens against the Euro (EUR) as the Bank of Japan’s (BoJ) Summary of Opinions from the December policy meeting reinforced expectations of continued tightening in 2026.

The BoJ raised its policy rate to 0.75% from 0.50% at its December policy meeting. A summary of opinions released early Monday showed that some board members see the need for further rate increases in the near future. This, in turn, provides some support to the JPY and acts as a headwind for the cross. Members also stated that the weaker JPY and rising long-term interest rates were due in part to the BoJ’s policy rate being too low relative to inflation.

On the Euro’s front, the European Central Bank (ECB) held interest rates steady earlier this month and hinted they would likely remain so for some time. ECB President Christine Lagarde noted that the central bank cannot provide forward guidance on future rate moves due to high uncertainty, emphasizing a data-dependent, meeting-by-meeting approach.

The money markets have priced in for a 25 bps interest rate cut by the ECB in February 2026, currently remaining below 10%. Signals that the ECB rate cut cycle is ending might help limit the EUR’s losses in the near term.