EUR to JPY Forecast & Outlook
In the near term, EUR/JPY is trading close to its 90-day average and near the recent high within the recent range. Risk-off sentiment supports safe-haven flows, exerting downward pressure on the pair. Current conditions suggest the pair may remain supported by demand for Japanese Yen amid geopolitical tensions and subdued Eurozone growth.
Transfer implications
- Expats: sending money to Japan may find less favourable exchange rates if the pair continues to decline.
- Travellers: buying Japanese Yen may face slightly higher costs if the pair weakens further.
- Businesses: paying Japanese Yen invoices could see less advantageous conversions if the trend persists.
Key drivers
- Rate gap: The Euro’s monetary policy remains less accommodative than Japan’s, keeping the rate gap narrow.
- Risk/commodities: Global risk sentiment is pressured by geopolitical tensions, bolstering safe-haven currencies like JPY.
- Global factors: Regional tensions in the Middle East heighten demand for safe assets, supporting JPY.
What could change it
- Upside risk: A stabilization or easing of geopolitical tensions could soften safe-haven demand, supporting the Euro.
- Downside risk: Escalating regional conflicts or deteriorating Eurozone data could cause further Yen strength.
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