Weaker-than-expected Japanese Q2 GDP growth weighs on the JPY, lifting the EUR/JPY cross to 185.20.
The EUR/JPY pair climbed to 185.20 in early European trading, supported by softer Japanese GDP data. Japan’s economy grew 0.3% in Q2, below the 0.5% forecast and prior print, pressuring the JPY.
Analysts had warned of potential negative growth due to higher import costs and supply disruptions linked to geopolitical tensions. Market expectations for a Bank of Japan rate hike by September 2026 may cushion further JPY declines.
Danske Bank analysts anticipate only one more 25-basis-point rate hike from the ECB, signaling a cautious outlook on further tightening.