EUR/JPY edged down to about 187.50 in early European trade on Thursday, as the Japanese Yen gained against the Euro amid fears of official action. Japan’s Finance Minister Satsuki Katayama said she told the G7 to closely watch foreign exchange moves.
Markets are pricing in a Bank of Japan rate rise to 1.00% by end‑June. In a Reuters poll, nearly two‑thirds of economists forecast that move, with an increase in April or June seen as equally likely due to uncertainty linked to the Iran war.
Daily Chart Technical Picture
On the daily chart, the pair remains above the 100‑day exponential moving average (EMA), keeping the near‑term trend positive. The 14‑day Relative Strength Index is around 69, just below overbought levels.
Resistance is first seen near 187.95 at the upper Bollinger Band, followed by 188.50. Support starts at 186.20, then the middle Bollinger Band near 185.00, with the 100‑day EMA at 182.75 below that.
Looking back to this time last year, in April 2025, we saw the EUR/JPY cross trading near 187.50. Our view then was bullish because the price was holding firmly above its 100-day moving average. This technical strength suggested that any small dips were likely buying opportunities.
The main drivers at that time were fears of intervention from Japanese officials and expectations for a Bank of Japan rate hike. We recall that economists polled by Reuters in April 2025 overwhelmingly predicted a rate hike to 1.00% by June of that year. Ultimately, the BoJ moved more cautiously, hiking rates to just 0.75% by the end of 2025 as the economy showed signs of slowing.
How The Trend Played Out
That bullish trend we identified did play out, as the pair broke through the 188.50 resistance level and continued to climb through the summer of 2025. This move validated the technical signals, rewarding those who stayed with the trend. Traders who bought call options or used bull call spreads based on that analysis saw significant gains as the pair pushed towards 195.00 later in the year.
Today, on April 16, 2026, the landscape has evolved, with the pair now trading much higher around 204.80. The primary theme is now the clear policy divergence, as recent Eurostat data shows core inflation in the Eurozone remains sticky at 2.8%. In contrast, Japan’s latest Tankan survey showed a sharp drop in business confidence, making further BoJ tightening unlikely in the near term.
For the coming weeks, this divergence suggests continued upward pressure, but we must be cautious as the pair is near multi-decade highs. Using options to define risk seems wise, such as purchasing call spreads to target a move toward 207.00. Given the high price level, traders holding existing long positions could also consider selling covered calls to generate income while waiting for the next leg up.
