EUR/JPY softens to near 180.00 on intervention fears

• EUR/JPY edges lower to around 180.00 in Wednesday's early European session.
• Verbal intervention from Japanese authorities underpins the Japanese Yen. 
• Traders expect the ECB to adopt a cautious stance and anticipate that the rate-cutting cycle will end. 

The EUR/JPY cross loses ground to near 180.00 during the early European session on Wednesday. The Japanese Yen (JPY) strengthens against the Euro (EUR) amid speculations that Japanese authorities would step into the market to stem further weakness in the domestic currency. 

Japan's Finance Minister Katayama is "alarmed" over the foreign exchange moves. Katayama emphasized that it is important for exchange rates to move in a stable manner consistent with fundamentals, adding that the government is watching markets closely as it finalizes its fiscal stance. Intervention fears might support the JPY against the EUR in the near term.

The Bank of Japan (BoJ) Governor Kazuo Ueda told Prime Minister Sanae Takaichi that the central bank is in the process of slowly dialing back its easing support for the economy, signaling his unshaken intention to carefully raise interest rates. Ueda added that the BOJ will make appropriate policy decisions based on data. 

While Ueda hinted at the chance of raising interest rates, Japanese Prime Minister Takaichi has voiced displeasure over the idea and urged the Japanese central bank to cooperate with government efforts to reflate the economy. Takaichi urged the BoJ to maintain low interest rates, emphasizing that monetary policy should support both robust economic growth and stable price increases. Uncertainty surrounding BoJ rate hikes could weigh on the Japanese Yen (JPY) and act as a tailwind for the cross. 

On the Euro's front, the European Central Bank (ECB) has kept its key interest rates unchanged since June 2025, with traders expecting this pause to last into the next year. The cautious stance of the ECB could provide some support to the EUR. According to a Reuters report from September 2025, analysts anticipate that the ECB's rate-cutting cycle will end amid a stable economic outlook.