Euro Slips Against Yen as Central Banks Diverge

The Euro weakened against the Japanese Yen on Thursday as investors weighed contrasting signals from Europe and Japan’s central banks. The European Central Bank (ECB) opted to keep interest rates unchanged, while expectations of a rate hike from the Bank of Japan (BoJ) lent strength to the Yen.

The currency pair traded near ¥182.40, slipping modestly after touching a daily high around ¥183.17. The ECB’s decision marked its fourth consecutive meeting without a change in borrowing costs, underscoring a cautious, data-dependent approach. Policymakers reiterated their focus on stabilizing inflation near the 2% target but offered no forward guidance, reflecting the uncertainty clouding the global economy.

ECB officials acknowledged resilience in the Eurozone but warned that global trade tensions and uneven inflation trends could weigh on growth. A stronger Euro, they noted, might help ease price pressures over time.

Meanwhile, attention in Asia turned to the BoJ, where markets widely anticipate a quarter-point increase in interest rates. With inflation running above target and wage growth improving, investors are keen to hear how Governor Kazuo Ueda frames the path ahead for further tightening.

The divergence between the ECB’s cautious stance and the BoJ’s expected move highlights the shifting balance in global monetary policy. For traders, the focus now lies not only on Friday’s BoJ decision but also on the signals accompanying it—guidance that could shape the Yen’s trajectory well into the new year.