EUR/JPY holds steady above 177.50 amid thin trading due to Japan's holiday

• EUR/JPY inches higher as the Japanese Yen struggles due to the BoJ's cautious policy stance.
• BoJ's Ueda left room for a possible December rate hike but said more data is needed to adjust monetary easing.
• ECB policymaker Villeroy noted the central bank is well-positioned after its October policy decision.

EUR/JPY holds ground after registering losses in the previous session, trading around 177.70 during the Asian hours on Monday. The currency cross edges higher as the Japanese Yen (JPY) weakens after the Bank of Japan (BoJ) maintained a cautious stance on interest rates. Trading is likely to remain subdued due to Japan's holiday-thinned market.

The BoJ kept rates unchanged last week, with Governor Kazuo Ueda warning that global trade policies could weigh on growth and profits. While he left room for a possible December rate hike, but needs some more data to adjust the degree of monetary easing.

Traders remain uncertain about the timing of the next rate hike by the Bank of Japan (BoJ) amid speculations that Japan's new Prime Minister Sanae Takaichi will pursue aggressive fiscal spending plans and resist policy tightening. Katayama said she no longer holds her earlier view that the JPY's fair value is around 120-130 per dollar.

On Friday, European Central Bank (ECB) policymaker Francois Villeroy de Galhau noted that the central bank is in a good position after the October policy decision. However, Villeroy added that this position is not a fixed one. "In view of various risks, including from the financial markets, we must maintain full optionality to act as necessary," he said, adding that agile pragmatism based on data and forecasts will be required at their next meetings, more than ever.

ECB policymaker and Governor of the Central Bank of Latvia, Martins Kazaks, said that risks to inflation and growth in the Eurozone are more balanced. ECB will move when needed, but shouldn't be jumpy, Kazaks added.