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EUR/JPY lifts near 186.20 ahead of ECB and Japan inflation data

Traders are watching the ECB, where the Main Refinancing Operations Rate and Deposit Facility Rate are expected to stay at 2.40% and 2.25%, while Japan’s core CPI is forecast to rise to 1.6% year over year.

Reported · Written up by our desk · Major Pairs

EUR/JPY was slightly higher around 186.20, with the Japanese yen pressured near multi-decade lows. FXStreet said the euro was comparatively steady as traders reduced positioning ahead of the European Central Bank decision and the upcoming Japan inflation release.

The ECB is expected to keep its Main Refinancing Operations Rate unchanged at 2.40% and its Deposit Facility Rate at 2.25%, after raising key rates by 25 basis points in June. FXStreet added that Eurozone Consumer Confidence is also in focus, with forecasts pointing to improvement to -16.8 in July from -17.7, which could help the euro if the reading and ECB messaging are perceived as hawkish.

In Japan, attention turns to the June CPI report, with core CPI excluding fresh food forecast to accelerate to 1.6% year over year from 1.4%. According to FXStreet, stronger-than-expected inflation could reinforce expectations of additional Bank of Japan tightening and support the yen, while a softer print combined with a hawkish ECB tone could keep EUR/JPY elevated.

FXStreet’s technical view described EUR/JPY at 186.17 on the 4-hour chart with a bullish near-term bias, supported by the pair holding above the 20-period SMA at 185.83 and the 100-period SMA at 185.32. It cited nearby demand between 185.91 and 186.07, resistance at 186.19, and initial support in the 186.07 to 186.04 zone.

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