EUR/JPY 2025: How many yen are in one euro and where is the pair heading?

The volatility of the EUR/JPY pair in 2025 so far

The euro-yen cross has experienced sharp movements during the first four months of the year. Starting from approximately 161.7 yen per euro in January, the quote plummeted to 155.6¥ at the end of February, then rebounded to a high of 164.2¥ in early May, and is currently around 163.4¥. This oscillation of over eight yen reflects the uncertainty stemming from political and monetary changes that are redefining market outlooks.

The question many investors ask is simple: how many yen are in one euro actually? The answer depends on the day. Four months ago, one euro was worth 161.7 yen; today, it fluctuates between 162 and 164 yen. This variability is not coincidental but the result of deep dynamics in international monetary policy.

Five factors explaining the turbulence

Bank of Japan rate hikes

The BoJ raised its benchmark rate from 0.25% to 0.50% in January, reaching the highest level since 2008. The yen immediately strengthened, but that momentum quickly lost strength because European yields remained much more attractive. Every move by Tokyo generates volatility but is insufficient to reverse the euro’s upward trend.

US tariffs and risk aversion

Washington announced tariffs of 10% on general imports and an additional 20% on EU products in February. Fear of a trade war triggered demand for safe assets, pushing the yen to its annual low of 155.6¥ on February 27. The yen acted as a refuge precisely because Japan is a global creditor without dependence on external financing.

Nature of the yen as a safe-haven currency

The yen attracts investors during times of uncertainty for several reasons: Japan’s solid financial position, the depth and liquidity of the Japanese foreign exchange market, and a special phenomenon called carry trade reversal. When investors borrow in yen at very low rates to invest in more profitable assets, a market shock causes them to repay these loans en masse, strengthening the currency.

ECB rate cuts

The European Central Bank reduced its deposit rate from 4% to 2.25% in three stages (January, March, and April). Each cut halted the euro’s rebound attempts because it narrows the yield differential between the two zones. As the European economy slows and inflation recedes, the ECB is likely to continue lowering rates.

Chinese stimulus and risk recovery

In May, Beijing injected liquidity by lowering its 7-day repo rate to 1.40% and relaxing bank reserve requirements. This stimulus revitalized Asian stock markets and increased risk appetite, reducing demand for yen as a safe haven. The EUR/JPY cross quickly rose toward 164.2¥ as investors abandoned defensive positions.

EUR/JPY outlook for the end of 2025

The battle of monetary policies

How many yen are in one euro at year-end? The answer will depend on the trajectory of two central banks. The Bank of Japan is likely to raise its rate to 0.75% in summer and to 1% in autumn, as markets discount. This is not a drastic shift but enough to partially unwind the carry trade that has pressured the yen for years.

Each increase by Tokyo reduces the attractiveness of financing in cheap yen to buy more profitable assets, creating structural demand for the Japanese currency. Meanwhile, the ECB will continue lowering rates, probably down to 2% before Christmas. The EUR/JPY yield differential will fall from the current two percentage points to just over one, an insufficient level to compensate for risks of moving capital into the euro in global tension scenarios.

The baseline scenario: a gradual downward range

Most likely, EUR/JPY will move within a broad but downward-biased range. When markets are calm and risk appetite returns, the euro should hold resistance above 165¥. If a crisis emerges (strong US inflation data, new tariffs, stock market correction), the yen will regain its safe-haven role, and the pair could fall to 158-160¥.

The baseline points to approximately 162¥ per euro at year-end, with a slight bias toward a marginally stronger yen if the BoJ confirms continued hikes in 2026.

Technical analysis: consolidation signals

On the daily chart, EUR/JPY trades above its main moving average (around 161¥), confirming an uptrend since March. However, recent candles show narrow bodies clustered near the upper edge of the Bollinger band (maximum 164.0¥; average 162.5¥), indicating weakening buying momentum.

The Bollinger channel has narrowed compared to March, a phenomenon that historically precedes sharp movements when the range expands again. The 14-period RSI is at 56 after touching 67 a week ago, leaving the overbought zone and showing bearish divergence with the May 1 high. This suggests a pause or short-term correction.

Key technical levels:

• Immediate support: Bollinger middle at 162.5¥
• Secondary support: confluence of lower band and moving average at 161¥
• Break of 161¥ opens the door to 159.8-160¥
• Resistance: 164.2¥; a clear close above would favor a move toward 166-168¥

Analysts’ projections for 2025

Different portals offer ranges reflecting their specific methodologies:

• Long-term analysis: 165-173¥
• Algorithmic models: 166.08-171.94¥
• Technical projections: 165.64¥
• Bank consensus: 160-170¥

Disparities exist because each approach weighs geopolitical, monetary, and technical factors differently. The commonality is that all anticipate consolidation within a broad range.

Investment strategies by time horizon

Short-term (3 to 6 months)

The cross has been moving within the 160-170¥ channel since the beginning of the year. An operational tactic is to sell euros and buy yen whenever the quote approaches 165-170¥, aiming for a target of 162¥ with disciplined stop at 171¥. The days before Bank of Japan meetings generate quick oscillations of one or two yen that active traders can exploit with smaller instruments.

Medium-term (year-end 2025)

Projections converge at 160-170¥ by year-end. A prudent strategy is to accumulate yen in tranches, buying whenever the cross exceeds 163-164¥, allowing for average price reduction and entry risk mitigation. Those needing euro flow hedging can set forwards or deposits in yen near current levels; the cost decreases as the differential narrows.

Profit management

If EUR/JPY falls to 160-162¥ after the BoJ hikes in summer and autumn, it’s advisable to take at least some profits while keeping the rest as protection against potential geopolitical shocks that have historically favored the yen.

Risks to monitor

An unexpected pause by the Bank of Japan if Japanese inflation recedes, an unforeseen rise in European core inflation that halts ECB cuts, or a prolonged stock rally reactivating carry trade could push the cross back to the upper part of the range.

Trade risks deserve special attention: a new round of tariffs between the US and EU would boost the yen as a safe haven, pressuring the pair toward 158-160¥. Any gesture of détente would have the opposite effect, allowing rebounds toward 167-168¥.

Maintaining clear stops and reviewing exposure after each central bank meeting remains essential.

Historical context: EUR/JPY since 1999

Since its inception, EUR/JPY has witnessed how the yen strengthens during crises and the euro fluctuates with European challenges. The 2008 financial crisis highlighted the yen’s safe-haven status while the euro suffered pressure from debt instability in the Eurozone in the early 2010s. Subsequently, European economic recovery and BoJ expansionary policies favored a gradual euro appreciation.

Today, with the BoJ raising rates and the ECB cutting them, the historic contest between the two currencies takes on a new nuance. The yen regains its refuge role while the euro faces slowdown.

Conclusion: the opportunity in 2025

Projections converge on a 158-170¥ range for year-end 2025, reflecting a definitive cycle change: the Bank of Japan abandons near-zero interest rates while the ECB reduces rates. The yield gap will fall from two points to just over one, eliminating the classic carry trade incentive.

How many yen are in one euro in practice? Currently around 163¥, but the trend suggests consolidation within 160-165¥ in the coming months, with a bias toward structural yen strengthening.

It’s a good time to buy yen on rebounds toward 165-170¥, aiming for 160-162¥ as a target with risk control at 171¥. The structural bias has turned favorable for the yen for the first time in nearly two decades: carry trade is no longer a one-way street, indicating a downward trend although gradual for EUR/JPY for the rest of the year.