EUR/JPY retreats as ECB holds rates, Japan steps up intervention warnings

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EUR/JPY declines and trades around 186.60 at the time of writing, after hitting two-week highs above 187.50, amid mixed pressures from European monetary policy and rising intervention risks in Japan.

EUR/JPY gives back recent gains and comes under pressure around 186.60.
ECB keeps rates unchanged and highlights rising uncertainty on inflation and growth.
Japan strengthens its intervention rhetoric, supporting the Japanese Yen.

EUR/JPY declines and trades around 186.60 at the time of writing, after hitting two-week highs above 187.50, amid mixed pressures from European monetary policy and rising intervention risks in Japan.

The European Central Bank (ECB) leaves its key interest rates unchanged at its April meeting, as expected, with the main refinancing rate at 2.15%, the marginal lending facility at 2.4% and the deposit facility at 2%. The central bank notes that incoming data has been broadly in line with its expectations, but warns that upside risks to inflation and downside risks to growth have intensified, particularly due to rising energy prices linked to geopolitical tensions in the Middle East.

The ECB emphasizes a data-dependent, meeting-by-meeting approach and reiterates that it is not pre-committing to any specific rate path. It also highlights that long-term inflation expectations remain well anchored, although short-term expectations have increased significantly.

On the Japanese side, pressure builds on the Japanese Yen (JPY) following firm comments from Finance Minister Satsuki Katayama, who signals that the time for decisive action in the foreign exchange market is approaching. These remarks come as USD/JPY moved above the key 160.00 level, reviving speculation about potential intervention by Japanese authorities to support the currency.

At the same time, rising Oil prices, driven by tensions in the Middle East, weigh on Japan’s economic outlook as a major energy importer, limiting the JPY’s upside despite intervention warnings.

In the Eurozone, macroeconomic data sends mixed signals. Germany’s Gross Domestic Product (GDP) expanded by 0.3% in the first quarter, beating expectations, but the Unemployment Rate rose to 6.4%, pointing to ongoing labor market fragility. Meanwhile, inflation in the Eurozone accelerated, with the Harmonized Index of Consumer Prices (HICP) increasing by 3% YoY in April, above forecasts.

Market focus now shifts to the press conference of ECB President Christine Lagarde for further guidance on the future path of monetary policy.

Euro Price Today

The table below shows the percentage change of Euro (EUR) against listed major currencies today. Euro was the strongest against the US Dollar.

	USD	EUR	GBP	JPY	CAD	AUD	NZD	CHF
USD		-0.13%	-0.25%	-2.21%	-0.09%	-0.48%	-0.61%	-0.89%
EUR	0.13%		-0.09%	-2.04%	0.03%	-0.33%	-0.48%	-0.73%
GBP	0.25%	0.09%		-1.93%	0.13%	-0.23%	-0.37%	-0.64%
JPY	2.21%	2.04%	1.93%		2.13%	1.75%	1.55%	1.30%
CAD	0.09%	-0.03%	-0.13%	-2.13%		-0.39%	-0.56%	-0.80%
AUD	0.48%	0.33%	0.23%	-1.75%	0.39%		-0.14%	-0.39%
NZD	0.61%	0.48%	0.37%	-1.55%	0.56%	0.14%		-0.25%
CHF	0.89%	0.73%	0.64%	-1.30%	0.80%	0.39%	0.25%

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Euro from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent EUR (base)/USD (quote).