• EUR/JPY rebounds from early lows as the Yen fails to gain traction despite stronger BoJ hike expectations.
• Euro supported by Eurozone GDP and employment data showing steady improvement in Q3.
• Markets await key Japanese data on Monday, including labor earnings and the final third-quarter GDP estimate.

EUR/JPY recovers from early lows on Friday as the Japanese Yen struggles to benefit from growing expectations of a Bank of Japan (BoJ) rate hike. At the time of writing, the pair is hovering near 180.77, rebounding after slipping to an intraday low of 180.10, though price action remains largely confined within the familiar range established since mid-November.

The Euro also finds support from the latest Eurozone growth figures released by Eurostat. Gross Domestic Product (GDP) for the third quarter rose 0.3% QoQ, compared with a 0.2% forecast and a 0.2% reading for Q2. On an annual basis, GDP increased 1.4% YoY, in line with expectations.

The accompanying details pointed to a broad-based improvement with household consumption rising 0.2%, government spending up 0.7%, and investment increasing 0.9%, while exports rose 0.7% and imports advanced 1.3%.

Labour figures were also encouraging, with Eurozone employment rising 0.2% QoQ, above the 0.1% expected and the 0.1% recorded in Q2. On a yearly basis, employment grew 0.6%, consistent with forecasts.

On the Japanese side, the Yen struggles to capitalize on firmer expectations that the BoJ may lift rates at its December 18-19 meeting. Hawkish remarks from the BoJ Governor Kazuo Ueda earlier this week revived speculation of an imminent policy adjustment.

Bloomberg reported earlier in the day that Bank of Japan officials are ready to raise interest rates at this month’s meeting, according to people familiar with the matter, provided there is no major shock to the economy or financial markets. The report added that policymakers also plan to indicate they are prepared to continue increasing rates if the economic outlook evolves as expected, while remaining cautious about how far rates may ultimately rise.

Looking ahead, attention turns to a fresh round of Japanese data due on Monday, including labor earnings, the current account, and the final estimate of third-quarter GDP. These releases will help shape expectations for the BoJ’s policy path as the December meeting approaches.