Japanese authorities signal readiness to act on currency volatility, weighing on the EUR/JPY cross ahead of German data.
The Euro fell against the Japanese Yen to around 184.85 in early European trading Tuesday, as traders priced in potential intervention by Japanese authorities. The yen’s rebound followed comments from officials reaffirming their willingness to act to stabilize the currency.
Japan’s Finance Minister Satsuki Katayama and Chief Cabinet Secretary Minoru Kihara both emphasized preparedness to intervene in markets if necessary, though Kihara declined to comment on the yen’s current level. Analysts suggest intervention is imminent, with markets closely monitoring developments.
German retail sales and inflation data due later Tuesday could influence ECB policy expectations, though markets have scaled back bets on further rate hikes as energy prices ease. ECB President Christine Lagarde noted progress in reducing Europe’s vulnerability to external shocks.