• EUR/JPY holds gains as a stronger Euro is supported by robust Germany’s Industrial Production.
• Germany’s seasonally adjusted industrial output rebounded by 0.4% in April, meeting market expectations and recovering from March’s 0.1% decline.
• The Japanese Yen steadies as lower oil prices temper energy inflation fears, easing market pressure for aggressive rate hikes.

EUR/JPY extends its gains for the second successive day, trading around 184.90 during the Asian hours on Tuesday. The currency cross holds gains as the Euro (EUR) remains stronger following the release of Industrial Production and Trade Balance data.

Industrial Output, in the Eurozone’s economic powerhouse Germany, rose by 0.4% over the month in April, the federal statistics authority Destatis said in figures adjusted for seasonal and calendar effects, compared with the expected 0.4% rise and a decline of 0.1% recorded in March (revised from -0.7%). Annually, the German Industrial Production came in at -0.5% in the same period, following March’s revised 3.4% fall.

Germany’s trade surplus narrowed to €14.5 billion in April 2026 from an upwardly revised €14.7 billion in March, falling short of market expectations of €15.0 billion. It was the smallest trade surplus since November, as imports grew faster than exports. Exports unexpectedly increased by 0.9% month-on-month to a near 3½-year high of €136.6 billion, accelerating from a downwardly revised 0.3% gain in March and easily beating expectations of a 0.3% decline. Meanwhile, imports climbed 1.2% month-on-month to €122.1 billion, the highest level since November 2022, though easing from a downwardly revised 4.5% increase in March.

The upside for the EUR/JPY cross remains limited as a stabilizing Japanese Yen (JPY) acts as a structural headwind. Recent pullbacks in global oil prices have helped temper fears of a severe energy-driven inflation spike, consequently easing immediate market pressure for hyper-aggressive rate hikes.

However, the Bank of Japan (BoJ) is still widely anticipated to tighten monetary policy later this month. Policymakers continue to grapple with underlying inflationary pressures stemming from historically elevated energy costs. In tandem with potential rate hikes, reports indicate that the BoJ will review its bond-tapering framework, with a high likelihood of scaling back its monthly asset purchases. Market participants are now turning their focus to Wednesday’s 30-year Japanese Government Bond (JGB) auction, which will serve as a key barometer to gauge investor demand within this shifting, higher-yield environment.