FX.co ★ PipsHunter99 | EUR/JPY

Yen strength from BoJ’s tightening bias and firm Tokyo inflation is pressuring EUR/JPY near 184.00. Soft eurozone inflation increases ECB easing expectations, limiting euro upside momentum. Price trapped between supply (184.20–184.80) and demand (183.00–183.40), signaling near-term consolidation or breakout risk. EUR/JPY traded near the 184.00 level on Friday, extending its downside for a second consecutive session as the Japanese yen gained strength following mixed but supportive inflation data from Tokyo. The pair slipped by around 0.10% on the day, reflecting renewed demand for the yen amid shifting expectations surrounding the Bank of Japan’s policy outlook and ongoing uncertainty over the European Central Bank’s easing trajectory. Tokyo’s latest Consumer Price Index showed inflation rising to 1.6% year-on-year in February, marginally higher than the prior reading. However, the core measure excluding fresh food moderated to 1.8%, easing from the previous 2.0% and falling below the Bank of Japan’s official 2% target for the first time since 2024. Although inflation slowed slightly, price pressures remain elevated compared to historical norms, keeping expectations of gradual policy tightening firmly in place. BoJ Governor Kazuo Ueda reinforced this outlook by stating that interest rates would continue to rise if economic and inflation forecasts remain intact. Board member Hajime Takada echoed this stance, emphasizing the importance of measured and steady tightening. This hawkish tone has supported the yen, limiting upside potential in EUR/JPY and increasing sensitivity to downside corrections near major technical levels. On the European front, inflation data from Germany and the broader euro area underperformed expectations, intensifying speculation that the ECB could deliver further policy easing. Germany’s CPI rose only 0.2% month-on-month, while the annual figure slowed to 1.9%. Meanwhile, the eurozone’s HICP climbed 0.4% monthly but slipped to 2.0% year-on-year, reinforcing signs of cooling price pressures. Although ECB President Christine Lagarde reiterated that interest rate decisions remain data-dependent and inflation is expected to stabilize near the target, the softer figures have weighed on euro sentiment. This growing divergence between the BoJ’s cautious tightening bias and the ECB’s potential easing cycle remains a central driver of near-term price action in EUR/JPY. EUR/JPY is currently trading around 184.40, positioning the pair at a crucial inflection zone. On the daily timeframe, price remains supported above the rising short-term moving averages, preserving the broader bullish structure. The region between 183.00 and 183.40 now acts as a key demand zone, where buyers previously stepped in aggressively, driving prices higher. As long as the price holds above this area, the bullish bias remains intact. On the H4 chart, price is consolidating just above short-term dynamic support, suggesting ongoing accumulation. The zone between 183.80 and 184.10 forms a short-term intraday demand pocket, where buying interest has repeatedly emerged. A sustained hold above this region keeps upside momentum alive, while a breakdown could trigger a deeper retracement toward the broader daily demand zone near 183.00. However, upside progress is being capped by a major supply zone stretching from 184.20 to 184.80. This area represents a previous structural support region that has now flipped into resistance. Sellers have consistently defended this zone, triggering multiple rejections and stalling bullish attempts. As price remains within this supply block, upside risks are capped, and short-term volatility is expected to remain elevated. A decisive breakout above 184.80 on a daily closing basis would invalidate this supply zone and signal fresh bullish continuation, potentially opening the door toward the 186.00 and 187.50 regions. Such a move would likely require renewed euro strength or a temporary pause in yen appreciation. Until then, rallies into supply are likely to face selling pressure. Conversely, rejection from this resistance area could trigger a corrective decline toward 183.40 initially, followed by a deeper test of the broader demand zone near 183.00. A sustained breakdown below this level would shift the short-term structure bearish and expose downside risks toward 181.80 and possibly 180.50.