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Euro eases vs yen but stays on bullish near-term track
The yen remains under pressure as doubts persist over Tokyo’s pension-fund repatriation timeline, while geopolitical developments and firmer oil prices help support the euro.
The euro pulled back from intra-week highs just above 185.60 versus the Japanese yen on Wednesday, but it held an immediate bullish bias and was up 0.5% on the week so far, according to FXStreet’s currency update.
FXStreet said skepticism about Japan’s plan to reallocate investment from pension funds has continued to weigh on the yen, after a Reuters report indicated Japan’s Finance Ministry has no immediate plans to repatriate pension assets, including those managed by the Government Pension Investment Fund (GPIF). The report also suggested repatriation could take months or years, leading speculative traders to resume yen shorts.
The yen’s weakness, FXStreet added, contrasts with support for the euro amid rising geopolitical tensions. It pointed to developments involving the Middle East, US military actions, and threats tied to energy routes, noting that oil prices have consolidated close to one-month highs.
FXStreet also cited comments from European Central Bank official and Austrian Central Bank Governor Martin Kocher, who affirmed there are no signs of second-round inflation effects in the euro zone but said the ECB is ready to take necessary steps to reach its 2% inflation target, while adding that the impact on the euro was limited.