• EUR/JPY climbs toward a new multi-year high above 179.00, up 0.40% on Wednesday.
• German inflation data for October confirm moderating price pressures, supporting the ECB’s current policy stance.
• Expectations of continued accommodative policy in Japan keep weighing on the Japanese Yen.

EUR/JPY trades higher around 179.20 at the time of writing, after hitting a new multi-year high at 179.29 on Wednesday, gaining 0.40% on the day, supported by the persistent weakness of the Japanese Yen (JPY). Investors are reacting to the confirmation of German inflation figures, showing a slowdown in price growth in October, as well as new remarks from Japanese officials calling for the continuation of a loose monetary policy.

In Europe, data published by Destatis showed that the German Harmonized Index of Consumer Prices (HICP) rose by 0.3% MoM and by 2.3% YoY, confirming the preliminary estimate. This reading, broadly in line with the European Central Bank’s (ECB) price stability target, strengthens the case for a prolonged pause in interest rates. Meanwhile, ECB Executive Board member Isabel Schnabel said at BNP Paribas’ Global Markets Conference that interest rates are “absolutely in a good place” and that inflation risks remain “slightly tilted to the upside,” while highlighting the underlying resilience of the Eurozone economy.

In Japan, the JPY weakens after Prime Minister Sanae Takaichi reiterated the need for close coordination with the Bank of Japan (BoJ) to support growth and maintain price stability. Her comments, along with the upcoming fiscal stimulus package due on November 21, reinforce expectations that the BoJ may delay its next rate hike beyond December.

Traders remain alert to the possibility of Japanese authorities intervening in the foreign exchange market should the Japanese Yen depreciate further. For now, the interest rate differential between the Eurozone and Japan continues to support EUR/JPY.