The EUR/JPY pair fell below 156.50 on Thursday as rising market uncertainty drove investors toward safe-haven assets, boosting demand for the Japanese yen. A shift in risk sentiment amid geopolitical tensions and concerns over global economic growth contributed to the yen’s strength, pressuring the euro lower.
Investors moved away from riskier assets, favoring traditional safe havens like the yen and U.S. Treasuries. This shift came as renewed concerns about global trade instability and central bank policies weighed on market confidence. The euro, which had been holding firm against major peers, lost ground as traders reassessed risk exposure.
Meanwhile, the Bank of Japan’s (BoJ) policy stance remains in focus, with speculation mounting that it may gradually shift away from its ultra-loose monetary policy. If the BoJ signals any adjustments, the yen could gain further momentum, adding to downward pressure on EUR/JPY in the coming sessions.
On the European side, the European Central Bank (ECB) remains cautious about its monetary outlook, with mixed economic signals keeping policymakers on edge. While inflation appears to be easing, growth concerns persist, making it unclear whether the ECB will maintain its hawkish stance for much longer. Any dovish shift could further weaken the euro against the yen.
Technical indicators suggest that EUR/JPY faces immediate support around 156.00, with a break below potentially opening the door for further declines. On the upside, any recovery attempts will likely meet resistance near 157.50, unless broader risk sentiment improves and safe-haven flows subside.
For now, traders remain focused on macroeconomic developments and risk sentiment, with the yen continuing to benefit from periods of market volatility. Any further deterioration in global conditions could keep EUR/JPY under pressure, reinforcing the yen’s appeal as investors seek stability in uncertain times.
