EUR/JPY rises to near 172.00 ahead of German data, Eurozone Economic Bulletin

• EUR/JPY rises as the ECB remains cautious, following stronger Eurozone Retail Sales.
• The Japanese Yen holds firm amid resurfacing US tariff concerns.
• Trump may impose an additional 15% tariff on all imports from Japan.

EUR/JPY continues its winning streak for the third successive day, trading around 171.90 during the Asian hours on Thursday. The currency cross gains ground ahead of the German Industrial Production, Trade Balance data, and Eurozone Economic Bulletin due later in the day.

The Euro (EUR) appreciates against its peers as the European Central Bank (ECB) is poised to remain cautious after the Eurozone's Retail Sales data was released on Wednesday. The annual increase was 3.1% in June, following a revised 1.9% growth in May. The market expectations were a 2.6% increase. Markets are assigning only around a 60% probability of another rate cut before March 2026.

The EUR/JPY cross appreciates as the Japanese Yen (JPY) remains steady amid renewed tariff concerns, driven by the US President Donald Trump's statement of imposing an additional 15% tariff on all Japanese imports, as Asahi newspaper cited a White House official.

Traders remain uncertain over the Bank of Japan's (BoJ) monetary policy outlook. Japan's central bank decided to keep its interest rates unchanged. However, the BoJ raised its inflation forecast and highlighted the increasing downside risks from global trade tensions.

BoJ's Minutes for June policy meeting indicated that officials remain open to further tightening, particularly if external risks ease. However, the recent Labor Cash Earnings came below market expectations in June, which has raised doubts about the near-term prospects for BoJ's rate hikes. The central bank also continues to grapple with weak wage growth, persistent inflation, and ongoing global trade uncertainty.