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Euro firms versus yen as German IFO lifts sentiment
EUR/JPY stays supported above 180.50 even after Japanese 10-year yields jumped to about 3.071%, as markets look for only a limited chance of further BoJ tightening.
EUR/JPY traded higher around 180.55 on Thursday, up 0.1% on the day at the time of writing, as the euro drew support from stronger-than-expected German business sentiment data, according to FXStreet.
Germany’s IFO Business Climate Index rose to 89.9 in September from 88.8 in August, with the Current Assessment Index improving to 89.5 from 88.5, and the Expectations Index climbing to 90.4 from 89, its highest level since February. On the Japan side, uncertainty around how quickly the Bank of Japan will continue tightening limited gains in the yen.
FXStreet also pointed to higher Japanese yields, with the 10-year JGB yield up nearly 9 basis points to 3.071% at the time of press, after US Treasury yields advanced earlier. The BoJ’s most recent decision included a 25 basis point hike to 1.25%, with a 7-2 vote that reflected division on further tightening pace, and markets were assigning around a 30% chance of another rate increase to 1.5% in October, which left EUR/JPY supported above 180.50.