EUR/JPY appreciates to near 172.00 as ECB signals policy easing

• EUR/JPY climbs as the Euro gains support after the European Central Bank signaled a pause in monetary easing.
• US Secretary of State Rubio spoke to European officials to push forward diplomatic efforts to end the war in Ukraine.
• A poll indicated a 20% rise in support for Japanese Prime Minister Ishiba despite losing in July's election.

EUR/JPY gains ground after registering losses in the previous session, trading around 171.90 during the Asian hours on Tuesday. The currency cross appreciates as the Euro (EUR) receives support against its peers, which could be attributed to the European Central Bank (ECB) signaling a pause in monetary easing.

The market sentiment favors the Euro following US Secretary of State Marco Rubio's talks with his European counterparts on Monday to advance diplomatic efforts aimed at ending the war in Ukraine. Ukrainian Foreign Minister Andrii Sybiha expressed gratitude to Rubio for his initiatives and to US President Donald Trump for his "peacemaking leadership," stressing that security guarantees for Ukraine remain essential, per Reuters.

The upside of the EUR/JPY cross could be restrained as the Japanese Yen (JPY) could gain ground amid increasing political stability in Japan. Reuters cited a Yomiuri newspaper public opinion poll on Monday, which indicated a 20% rise in support for Japanese Prime Minister Shigeru Ishiba despite his ruling coalition losing its majority in July's parliamentary election. Support for Ishiba's cabinet rose to 39%, marking a 17% jump from last month's post-upper house election survey.

Japanese Finance Minister Katsunobu Kato said on Tuesday he was "alarmed" by recent FX moves, particularly those driven by speculators, stressing the importance of currencies moving stably in line with fundamentals. Kato added that the government will closely monitor JGB market developments and pursue appropriate debt management.