EUR/JPY holds losses near 172.00, moves little following Eurozone PMI data

• EUR/JPY shows little reaction to the HCOB Purchasing Managers' Index (PMI) data from the Eurozone.
• Eurozone Manufacturing PMI rose to 49.8 and Services PMI advanced to 51.2 in July.
• The Japanese Yen receives support from optimism surrounding the new US-Japan trade deal.

EUR/JPY loses ground after halting its five-day winning streak, trading around 172.20 during the European hours on Thursday. The currency cross remains subdued despite the release of improved HCOB Purchasing Managers' Index (PMI) data from Eurozone.

The preliminary HCOB Composite PMI climbed to 50.0 in July, from the previous 50.6 reading and surpassing the expected 50.8. Meanwhile, the Eurozone Manufacturing PMI rose to 49.8, from 49.5 reported in June, matching the market consensus of 49.8. The Services PMI advanced to 51.2 from 50.5 prior, coming above the expected 50.8 reading.

The HCOB Preliminary German Composite Output Index came in at 50.3 in July, against 50.4 in June and 50.7 expected. The index was at its lowest level in two months. Meanwhile, the Manufacturing PMI improved to 49.2 from June's 49.0, though missing the market forecast of 49.4. The measure hit a 36-month high. Services PMI grew to 50.1 from 49.7 prior, against the expected 50.0 reading.

Moreover, Germany's GfK Consumer Confidence Survey fell to -21.5 for August from -20.3 prior reading. The print missed market consensus of -19.2, marking the lowest reading since April. The decline highlighted rising consumer pessimism driven by economic uncertainty, including worries about US tariffs on European goods.

The EUR/JPY cross also depreciates as the Japanese Yen (JPY) gains ground due to optimism surrounding the new United States (US)-Japan trade deal. On Tuesday, US President Donald Trump announced a major tariff deal with Japan, which includes a 15% tariff on Japanese exports.