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Euro stays near one-month highs versus yen as risk mood softens
EUR/JPY hovered around 186.00, consolidating after a roughly 0.8% weekly rise, as yen sentiment weakened on uncertainty over any GPIF repatriation plan.
The euro held near one-month highs against the Japanese yen, trading practically flat just below 186.00 on Thursday as it consolidated gains from a roughly 0.8% rally earlier in the week, FXStreet said. The pair rose over the prior three days on doubts that Tokyo will repatriate Government Pension Investment Fund assets and on hawkish comments from euro zone central bank officials.
FXStreet noted the yen strengthened somewhat on the day, but investors appeared to favor the euro as a more resilient currency amid a risk-off tone. Caution was also tied to renewed hostilities in Iran and a 15% surge in oil prices, factors that could weigh on both the euro zone and Japan.
On the euro side, European Central Bank policymakers maintained a hawkish posture that has supported expectations for possible rate hikes later this year. FXStreet cited comments from Austrian Central Bank Governor and ECB board member Marin Kocher, who said he does not see second-round inflation effects yet but the ECB is “ready to act” if needed, and remarks from Bundesbank President Joachim Nagel that it remains advisable to act decisively if required.
By contrast, yen weakness reflected market reassessment after a Reuters report suggested the Japanese government does not have a specific plan to repatriate investments from the GPIF. The yen initially benefited after Japan announced an initiative last week, but FXStreet said traders returned to yen-selling positions as they realized any impact could take months or years to materialize.