Euro under pressure: The currency pair EUR/JPY closes trading near the psychological level of 183.30

just_another_wallet · 2026-01-20T13:13:44+00:00

In the first week of 2026, the euro faced challenges against the Japanese yen, influenced by the Bank of Japan's plans to normalize monetary policy and rising geopolitical tensions. Investor sentiment is further tested ahead of the January Sentix index release.

just_another_wallet

2026-01-20 13:13:44

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Japanese Yen Strengthens Its Position in the New Year

The first week of 2026 was unsuccessful for the euro. The EUR/JPY currency pair continues to face resistance within a sideways range, having fallen near a two-week low at 183.30. This level has become a critical reference point for traders after the quotes reached a peak of 184.40 on Friday and then sharply reversed downward.

Japan’s Monetary Policy as a Driver of Yen Appreciation

On Monday, Bank of Japan Governor Kazuo Ueda issued a statement supporting the trend of yen strengthening. The central bank leader confirmed intentions to gradually normalize monetary policy and move toward raising interest rates in the coming months if macroeconomic indicators remain within the target range. The Japanese yen has historically been a safe-haven asset during times of uncertainty, so such signals from the regulator naturally increase demand for it.

Geopolitical Risks Heighten Investor Anxiety

Ongoing uncertainty around the situation in Venezuela — with U.S. military involvement and court hearings regarding President Nicolás Maduro on Monday — adds stress for investors. President Donald Trump signals the possibility of further military steps if the country’s authorities do not comply with U.S. demands for reforming the oil sector. Such geopolitical tension traditionally prompts investors to seek refuge in less risky assets.

January Investor Confidence Data on the Horizon

The key indicator for Europe — the January Sentix Confidence Index — will be published on Monday. This index measures the sentiment of professional traders and analysts regarding the economic climate. Since August of previous years, the indicator has consistently remained in negative territory, signaling persistent pessimism among capital market participants.

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