• EUR/JPY trades slightly lower as the Japanese Yen benefits from persistent intervention concerns.
• Eurozone Industrial Production data beats expectations in November.
• Monetary policy outlooks remain cautious on both sides, limiting directional moves.

EUR/JPY trades around 184.40 on Thursday at the time of writing, down 0.15% on the day. The cross reflects a fragile balance between a Euro (EUR) supported by stronger-than-expected macroeconomic data and a Japanese Yen (JPY) that retains some defensive appeal amid political and monetary uncertainties in Japan.

On the Eurozone side, industrial activity shows signs of improvement. Industrial Production rises by 0.7% MoM in November, a pace above market expectations, while YoY growth reaches 2.5%. These figures published by Eurostat confirm a more resilient momentum in the manufacturing sector, helping to limit downside pressure on the single currency.

At the same time, investors believe the European Central Bank (ECB) is nearing the end of its monetary easing cycle. Markets do not expect an imminent rate cut, with some analysts pointing instead to a possible reduction later in 2026, given the still subdued inflation backdrop.

In Japan, the JPY finds relative support from rising intervention risks in the foreign exchange market. Authorities continue to issue verbal warnings against excessive currency moves, as elevated levels in several Japanese Yen crosses attract investor attention. Japan’s Finance Minister reiterated that all options remain on the table to counter what are seen as excessive fluctuations. This rhetoric helps cap Japanese Yen selling pressure, even though the currency remains weighed down by expectations of accommodative fiscal and monetary policies.

The Japanese political backdrop also adds another layer of uncertainty. Speculation about a snap election and the prospect of expansionary budget plans aimed at supporting growth are fueling expectations of looser fiscal policy. This limits the potential for a sustained JPY recovery, despite occasional safe-haven demand.

Overall, EUR/JPY remains sensitive to macroeconomic releases and central bank signals. Solid data from the Eurozone provide underlying support for the Euro, while intervention risks and political developments in Japan continue to shape Japanese Yen dynamics, keeping the cross in a cautious consolidation phase.