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EUR/JPY holds below 184.00 as Japanese Yen steadies on suspected Japanese intervention

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  • EUR/JPY weakens as Japanese Yen steadies amid caution following suspected Japanese intervention last week.
  • Commerzbank’s Volkmar Baur said authorities likely intervened near USD/JPY 157.00 after the pair briefly hit 160.72.
  • The Euro weakens after US repelled Iranian attacks in Hormuz and an Iranian drone reportedly struck UAE’s Fujairah port.

EUR/JPY extends its losses for the second consecutive day, trading around 183.80 during the Asian hours on Tuesday. The currency cross weakens as the Japanese Yen (JPY) stabilizes against major peers amid cautious trading, following suspected intervention by Japanese authorities last week. Japanese Finance Minister Satsuki Katayama said Japan stands ready to act against speculative foreign-exchange moves to limit JPY weakness.

Commerzbank’s Volkmar Baur noted that authorities appear to have intervened near USD/JPY 157.00 after the pair briefly surged to 160.72. Tokyo inflation data showed headline gains driven entirely by energy, while core inflation slipped to a one-year low. The bank cautioned that conflict-related sentiment may keep core inflation subdued, reducing the likelihood of Bank of Japan rate hikes and weighing on the Japanese Yen.

Meanwhile, the EUR/JPY cross declines as the Euro (EUR) comes under pressure amid escalating Middle East tensions, which have dampened risk appetite and threaten to disrupt the four-week ceasefire between the United States (US) and Iran. US forces repelled Iranian attacks while escorting two US-flagged vessels through the Strait of Hormuz, and the UAE’s Fujairah port was reportedly struck by an Iranian drone.

Iranian parliament speaker Mohammad Bagher Ghalibaf said on X that “The new equation of the Strait of Hormuz is taking shape. The security of shipping and energy transit has been undermined by the United States and its allies through ceasefire violations and blockade measures; however, their actions will ultimately fail. We fully understand that maintaining the current situation is unacceptable for the US, while we have not even begun yet.”

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