Euro: Support at 180 eyed against Yen on BoJ risk – DBS

EUR/JPY is approaching a key psychological support level at 180 as traders weigh the possibility of a faster Bank of Japan normalization cycle. DBS strategist Philip Wee says the downside risk is less straightforward than in CHF/JPY, with the euro still benefiting from broader strength.

Euro resilience against the Swiss franc and British pound, together with an anti-US-dollar theme, is providing a tailwind for EUR. Markets are also pricing a high probability of rate hikes from both the European Central Bank and the Bank of Japan, keeping monetary policy expectations at the center of the pair's outlook.

The yen could nevertheless gain the upper hand if the BoJ signals an accelerated pace of normalization. Such a shift could push EUR/JPY below the psychological 180 level and increase downside pressure on the pair.

For traders, 180 remains the key level to monitor. Holding above it would preserve the euro's near-term support, while a sustained break below could signal a deeper EUR/JPY correction.