The euro strengthened against the Japanese yen, approaching the 157.00 level, as reports of Germany considering an increase in defense spending lifted investor confidence. The move signals a potential fiscal boost for Europe’s largest economy, supporting the shared currency despite lingering economic concerns.
Market sentiment around the euro improved amid expectations that increased government expenditure could stimulate growth, particularly in the face of ongoing economic challenges in the eurozone. Investors are closely monitoring how this shift in fiscal policy might influence the European Central Bank’s stance on interest rates.
Meanwhile, the Japanese yen remained under pressure, with its safe-haven appeal diminishing as risk appetite improved. The Bank of Japan’s ultra-loose monetary policy has also kept the yen weak, making it less attractive compared to other major currencies.
The broader market environment continues to shape EUR/JPY’s direction, with geopolitical developments, inflation trends, and central bank policies playing a key role. Traders are watching for any signals from policymakers that could further impact the currency pair.
From a technical perspective, EUR/JPY is testing key resistance near 157.00, with a decisive break higher potentially leading to further gains. However, any shifts in global risk sentiment or unexpected economic data could trigger volatility.
For now, the euro remains supported by fiscal policy expectations, while the yen struggles to find strong demand. As investors assess the broader economic landscape, EUR/JPY’s next move will depend on incoming data and central bank guidance.
