EUR/JPY trades around 185.70 on Friday at the time of writing, virtually unchanged on the day.
The Japanese Yen (JPY) gains some support from firmer Japanese inflation data, but the move is offset by resilience in the Euro (EUR) following better-than-expected activity indicators in the Eurozone
In Japan, the core Consumer Price Index (CPI), which excludes fresh food, rises 1.8% YoY in July, following a 1.6% increase in June. This marks its fastest pace of growth since January. A measure excluding volatile components also points to persistent inflationary pressures, accelerating from the previous month.
These figures reinforce expectations that the Bank of Japan (BoJ) could continue normalizing its monetary policy. Firmer underlying inflation could give the central bank more room to raise interest rates, a prospect that supports the Japanese Yen and limits the upside in EUR/JPY. However, the resilience of the Euro prevents the pair from declining significantly.