EUR/JPY Edges Higher on Anticipation of BoJ and ECB Rate Hikes

The EUR/JPY currency pair gained 0.15% on Friday, trading around 184.15, amid growing expectations that the Bank of Japan could raise interest rates as soon as September. Investors are also pricing in further monetary tightening from the European Central Bank, supporting the euro against the yen, according to FX Street.

Market consensus sees Japan’s preliminary Q2 GDP holding steady at 0.5% quarter-on-quarter, with private consumption identified as the primary driver of growth. This outlook was confirmed by ING, which also expects the GDP figure to maintain the same pace in Q2.

With Japan’s economic growth steady and inflation pressures mounting globally, the possibility of a BoJ rate hike adds a new dynamic to the FX market. Japanese investors remain cautious as monetary policy divergence between the BoJ and ECB continues to influence currency movements.