Euro / Japanese Yen

EUR/JPY's 20-day volatility stands at 0.62% a day, making it one of the most volatile of the forex Kinzan tracks (their median is 0.31%).

At −0.0σ, the last 24 hours have been an entirely ordinary session for EUR/JPY.

It sits in the upper half of its 24-hour range of 177.651–178.687, measured on hourly closes.

The move was spread across the day rather than concentrated in one session; Asia contributed the largest share, about 42%.

Over the last 60 sessions of daily returns, it has moved most closely with GBP/JPY (+0.94, a very strong relationship), and most inversely to MSFT (−0.40).

Market read: The pair is languishing near the bottom of its daily range following consistent selling.

What it is

EUR/JPY expresses the value of one euro in yen without going through the dollar. It is the most liquid yen cross, and in practice its price is closely linked to two larger markets: EUR/USD multiplied by USD/JPY gives the implied cross rate, and dealers arbitrage any gap between them. The quote runs to three decimals, with the second as the pip.

What drives it

This pair sets the two lowest-yielding major central banks of recent decades against each other. For years both the European Central Bank and the Bank of Japan held policy rates at or below zero, so the cross was driven less by yield differential than by sentiment. As either bank shifts away from those settings, the rate gap has become a more important influence. European data — German industrial figures, euro-area inflation — works through the euro leg, while Japanese inflation, wage negotiations and BoJ policy work through the yen leg. Euro-area investors buying Japanese assets and Japanese institutions buying European bonds both generate steady flows through this pair. In practice the cross also functions as a sentiment barometer: when investors shed risk, the yen tends to be bought and EUR/JPY tends to fall.

How it trades through the day

The cross is unusual in having a natural home in two sessions. In the Asia block (22:00–07:00 UTC), Japanese flows and data dominate. When London opens (07:00–13:00 UTC), European releases and the euro’s broader direction take over, and volume often peaks. During New York (13:00–22:00 UTC) EUR/JPY is increasingly driven by US yields through its USD/JPY component and by the mood of US equities.

What it tends to move with

EUR/JPY tends to move with USD/JPY and GBP/JPY, and it has historically shown a positive relationship with European equities such as the DAX 40 and with the Nikkei 225. During risk aversion it has often fallen as the VIX rises. It is typically somewhat less volatile than GBP/JPY.