• EUR/JPY weakens as the Japanese Yen strengthens amid rising speculation of market intervention.
• Japan’s PM Takaichi said the government would act against speculative and abnormal market moves, without naming the market.
• Germany’s IFO Business Sentiment Index will be eyed later in the day.

EUR/JPY extends its losses for the second successive session, trading around 182.90 during the Asian hours on Monday. The currency cross depreciates as the Japanese Yen (JPY) gains ground amid growing speculation of intervention.

Bloomberg reported on Sunday that Japan’s Prime Minister (PM), Sanae Takaichi, said the government would take necessary action against speculative and abnormal market movements, without specifying which market she was referring to.

Prime Minister Takaichi’s remarks came after a sharp reversal in the yen late on Friday, when traders said the Federal Reserve Bank of New York had conducted a so-called rate check with major banks, seeking indicative JPY exchange rates. Such a move is widely seen as a signal that authorities may be preparing for another intervention. Earlier that day, however, Japan’s top currency official declined to comment on whether a rate check had been conducted by Japanese authorities.

The Japanese Yen was also supported by broad-based US dollar weakness, as heightened geopolitical and trade risks weighed on the greenback, alongside expectations that President Donald Trump could soon replace Fed Chair Jerome Powell with a more dovish successor.

Eurozone flash PMI data pointed to a soft services sector in January, with the index slipping to 51.9, below both December’s reading and market expectations. Earlier releases from Germany were more encouraging, as the Services PMI beat forecasts and remained in expansionary territory, while the Manufacturing PMI improved but stayed below the expansion–contraction threshold. Traders will likely observe Germany’s IFO - Business Sentiment Index later in the day.