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November 24, 2025

EUR/JPY Rises to 180.7 After Tokyo Approves ¥21.3T Stimulus

Overview

EUR/JPY traded around 180.70 on Monday, up roughly 0.35% as markets reacted to Japan's approval of a ¥21.3 trillion fiscal stimulus package (¥21.3T fiscal stimulus) and the prospect of higher JGB issuance. The combination of larger fiscal deficits, likely increased bond supply and a still-accommodative Bank of Japan (BoJ) stance (BoJ keeps rates steady) has lifted expectations for persistent yen weakness. Japanese officials have nevertheless signalled concern about rapid currency moves, keeping the risk of verbal or direct FX intervention top of mind for traders.

Key Drivers

1. Fiscal stimulus and debt issuance

Tokyo's ¥21.3T package raises market expectations for greater government bond issuance to finance spending, which could pressure JPY through higher supply and weaker sovereign demand dynamics. Traders are pricing a wider divergence between Japanese policy and other major central banks as a result.

2. BoJ stance vs. global central banks

The BoJ remains accommodative, with limited near-term signs of aggressive tightening even as some board members hint at eventual policy shifts. That contrasts with a less-dovish tone from the ECB and markets pricing potential Fed easing — an environment that supports cross-rate moves such as EUR/JPY and USD/JPY.

3. Official warnings & intervention risk

Japanese policymakers, including the Finance Minister, have issued warnings against excessive yen moves. Intervention — verbal, coordinated, or direct market action — is a live risk that can abruptly reverse yen trends. Traders should treat sustained JPY weakness as a conditional opportunity rather than an entrenched market state.

Technical Outlook

Short-term price action: EUR/JPY holding near 180.70 signals bullish momentum while remaining above recent intraday support around the 180.00 psychological level. Immediate resistance sits in the 182.0–183.0 area; a clean breakout above that zone would open room toward the mid-180s. On the downside, a break below 180.00 and follow-through under 178.00 would warn of a short-term reversal.

Trading Ideas and Risk Management

Directional ideas

  • Tactical long EUR/JPY: Consider entries on shallow pullbacks toward 180.00–179.50 with tight risk control; target initial resistance near 182.0 and trail stops to capture momentum if the BoJ remains accommodative.
  • Alternative: Use options to express a bullish view while defining maximum downside exposure in the event of intervention.

Hedging and diversification

Given intervention risk, hedges matter. Short-duration USD/JPY or long EUR/USD exposures can help diversify currency exposure. For traders who also manage crypto allocations, a dovish global liquidity impulse (e.g., Fed easing expectations) may boost risk assets, so position sizing across forex trading and crypto trading should reflect correlated moves.

Execution & automation

Volatility around policy statements and intervention headlines favors disciplined execution. Automated strategies and smart order routing can help manage slippage and emotion. Consider tools such as the Trade Assistant Bot to scan setups, or the Forex trading bot to execute predefined, risk-managed entries when your criteria are met.

Watchlist & Catalysts

Monitor the following events and data for near-term changes in EUR/JPY direction:

  • BoJ minutes, speeches from BoJ board members and the Finance Minister for signs of intervention intent or policy shifts.
  • Eurozone economic readings (PMIs, German IFO) and ECB commentary that could weaken or strengthen EUR.
  • US macro and Fed messaging: stronger US data or a shift in Fed cut pricing could affect USD crosses and global risk sentiment.

Risks

Key risks include sudden Japanese FX intervention or coordinated G7 action, an unexpected BoJ rate change timeline (earlier-than-anticipated hikes), and European growth deterioration reducing EUR strength. These events can produce sharp, rapid reversals that are costly without disciplined stops and position sizing.

Conclusion

Japan's new ¥21.3T stimulus and continued BoJ accommodation have lifted EUR/JPY toward 180.7 and created a tactical opportunity for forex traders who can manage intervention risk. Whether you prefer discretionary or automated trading, integrating robust risk controls and monitoring policy headlines is essential. For traders looking to apply systematic rules and reduce execution slippage, automated trading tools can help. Explore PlayOnBit's suite — from the Trade Assistant Bot for idea generation to the Forex trading bot for execution — to test strategies in live forex markets or as part of broader crypto trading and risk-management plans.

Try it now

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