EUR/JPY rose to about 184.15 in early European trading on Friday. Volumes may be thin because of the Good Friday holiday.
Comments from ECB policymakers supported the euro against the yen. Francois Villeroy de Galhau said the next interest rate move is very likely to be an increase, though it is too early to say when hiking will start.
Middle East Tensions Support Yen Demand
Tensions in the Middle East may boost demand for the safe-haven yen. US President Donald Trump urged Iran to make a deal after a strike destroyed a bridge near Tehran.
Iran’s foreign minister Abbas Araghchi said strikes on civilian infrastructure would not make Iran back down. He said the actions “convey the defeat and moral collapse of an enemy in disarray.”
On the daily chart, EUR/JPY stayed above the rising 100-day EMA near 182.10. Price also sat just under the upper Bollinger Band, while the Bollinger middle band was near 183.50 and RSI was just above 54.
Support levels were noted at 183.50 and 182.50–182.10, with a further level at 181.50 if that zone breaks. Resistance was near 184.80, and a daily close above it may point to 186.00.
Looking Back At April 2025
Looking back at this time last year, in April 2025, we saw the EUR/JPY cross showing strength around the 184.15 level. This was largely driven by hawkish commentary from European Central Bank officials who were openly discussing interest rate increases. The market was pricing in a much stronger Euro based on this forward guidance.
The situation has changed significantly since then, as the policy outlooks have flipped. Eurozone inflation has since cooled to 2.3% as of the March 2026 data, and the ECB is now hinting at rate cuts later this summer to support the economy. This shift away from a hawkish stance has fundamentally weakened the Euro’s long-term appeal against its peers.
Furthermore, the Bank of Japan made its historic move away from negative interest rates last month, a pivot that has provided independent strength to the Yen. This policy divergence between a newly hawkish BoJ and a softening ECB suggests traders should consider strategies that benefit from a falling or range-bound EUR/JPY. Buying puts on EUR/JPY could be a direct way to position for further downside in the coming weeks.
The pair has fallen dramatically from those 2025 highs, now trading near 164.50, well below the old support levels we watched like 182.10. While last year’s specific tensions between the US and Iran have eased, the Middle East remains a source of sudden volatility, which can still trigger safe-haven flows into the Yen. These geopolitical risks mean implied volatility may remain elevated, making options strategies attractive.
Given this backdrop, selling out-of-the-money call options or implementing bear call spreads might be a prudent approach for the coming weeks. This strategy allows traders to collect premium while defining their risk, capitalizing on the view that any upside in EUR/JPY will likely be capped near the 166.00 resistance level. The current RSI on the daily chart sits near 45, indicating there is still room for the cross to move lower before becoming oversold.
