Euro gains against Japanese Yen as ECB, BoJ rate hike bets intensify
EUR/JPY rises 0.15% on Friday and trades around 184.15 at the time of writing. The pair remains supported despite growing expectations that Japan could raise interest rates as soon as September, while investors also anticipate further monetary tightening in the Eurozone.
The Euro strengthened against the Japanese Yen on Friday, trading around 184.15. Despite growing expectations that Japan may raise interest rates in September, investors anticipate further tightening in the Eurozone. The European Central Bank is expected to raise rates at its September meeting, marking its second hike this year.
Eurozone GDP grew by 0.4% on a quarter-over-quarter basis in the second quarter, matching forecasts. While Japan's monetary policy outlook limits the upside potential for EUR/JPY, expectations of a faster normalization of Bank of Japan monetary policy support the yen. Analysts at Nordea anticipate three more 25bp increases from the ECB, taking the deposit rate to 3%, while Commerzbank expects only two hikes, with the deposit rate at 2.5%.
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