Investors price in a June ECB rate increase while weighing potential Bank of Japan currency intervention risks.
EUR JPY climbed to 185.85, up 0.12% on Thursday, as markets bet on further European Central Bank tightening. The pair gained amid expectations of a June rate hike by the ECB, contrasting with concerns over possible Bank of Japan intervention to support the yen.
Prior to this move, EUR JPY had fluctuated near multi-year highs, driven by diverging monetary policy outlooks. The ECB has signaled further tightening, while the BoJ remains cautious, balancing inflation risks with economic growth.
Traders are closely monitoring comments from both central banks for clues on future policy shifts.