EUR/JPY (Euro vs Japanese Yen)

📜 History

The euro was created under the Maastricht Treaty, signed in 1992 and in force from 1993. It became an accounting currency on 1 January 1999, and euro notes and coins entered circulation on 1 January 2002. EUR/JPY therefore dates from 1999, when the euro first existed. The yen has floated since the early 1970s, after the Bretton Woods system of fixed rates ended. The 2008 global financial crisis and the euro sovereign debt crisis from 2010 caused sharp moves in the pair. The Bank of Japan's negative rates from 2016 and its yield curve control policy also shaped long trends. Japan's 2011 earthquake triggered strong yen buying as a safe haven.

⚙️ What moves the price

• →ECB and Bank of Japan policy rates and rate expectations. The gap between euro and yen yields is a key driver.
• →Bank of Japan policy changes, including yield curve control and currency intervention, can move the yen quickly.
• →Euro-area and Japanese inflation, GDP and employment data, especially surprises against forecasts.
• →Risk sentiment: the yen often strengthens in risk-off periods, which pushes EUR/JPY lower.
• →Energy prices: Japan and the euro area are both large energy importers, so oil and gas moves affect both currencies.

Character

• •A major cross pair with high liquidity. It is usually more volatile than EUR/USD and moves sharply on risk events.
• •Yen safe-haven behaviour: EUR/JPY often falls quickly during market stress.
• •Can trend for long periods when central bank policies diverge.
• •Liquidity is strongest during the overlap of the European and Tokyo sessions.

When to trade

• ✅The European morning, around the London open, when liquidity is high and spreads are tight.
• ✅Around ECB and Bank of Japan rate decisions, with extra care because moves can be sharp.
• ✅During clear periods of interest rate divergence between the two central banks.

When not to trade

• ⛔Right before or during Bank of Japan meetings or periods of possible currency intervention, when moves can be sudden.
• ⛔Thin late-New York hours and Japanese public holidays, when volume is low.
• ⛔Trading large size without a stop-loss, since the pair can gap on weekend news.

Our verified setups

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Simulation: $10,000 deposit, $100 risk per trade. Pips — price movement; $ — result at fixed risk.