EUR/JPY 2025: How many yen are in one euro and why is this moment key for investing?

The euro’s exchange rate in yen has experienced a 2025 marked by unexpected twists. Since January, the EUR/JPY pair has fluctuated between 155.6 ¥ and 164.2 ¥, reflecting a battle between divergent monetary policies and geopolitical tensions. Today, (May 10), it stands near 163.4 ¥, meaning approximately how many yen are in one euro: about 163 units of the Japanese currency per euro. This broad range in just four months reveals that the market faces a historic crossroads.

The Five Catalysts That Have Redefined EUR/JPY in 2025

The Bank of Japan accelerates its normalization

In January, Japan’s monetary authority raised its key rate from 0.25% to 0.50%, marking the highest level since 2008. Although the yen initially strengthened, the effect was fleeting: European yields remained substantially higher, continuing to attract capital into the euro.

Washington implements global tariffs

The introduction of a 10% tariff on all U.S. imports, with an additional 20% surcharge on goods originating from the European Union, spiked demand for safe-haven assets. The pair plummeted to 155.6 ¥ on February 27, demonstrating how quickly investors flee to safe currencies when trade tensions emerge.

The yen as an anchor in turbulent times

The Japanese currency maintains its historic status as a refuge for several converging reasons: Japan is a net global creditor that does not depend on external financing, inspiring confidence. Additionally, the yen market is the most liquid in Asia, allowing quick repositioning when alarms sound. The carry trade amplifies these movements: when markets calm, many investors borrow in yen to invest in higher-yield assets; when panic appears, they close these positions by mass repurchasing yen.

Europe cuts rates while slowing growth

The ECB implemented three consecutive rate cuts (January 30, March 12, and April 17), lowering its deposit facility from 4% to 2.25%. With economic activity slowing and inflation retreating, each cut hampered the euro’s recovery attempts against the Japanese currency.

Chinese stimulus rekindles risk appetite

In May, Beijing injected liquidity by lowering its 7-day repo rate to 1.40% and easing bank reserve requirements. The boost encouraged Asian stock markets, prompting investors to abandon defensive yen positions. The EUR/JPY jumped to 164.2 ¥ on May 1, demonstrating how global risk sentiment instantly redefines how many yen are in one euro.

EUR/JPY Outlook Until Year-End: Where Is the Compass Pointing?

The cycle change is structural, not cyclical

Markets expect the Bank of Japan to raise its rate to 0.75% in summer and to 1% before autumn. This gradual but firm shift deactivates the carry trade machine that has pressured the yen for years. Each increase reduces the appeal of borrowing in yen to buy higher-yielding assets, contracting the supply of the Japanese currency and providing a structural floor.

At the same time, the ECB is likely to raise rates to 2% before Christmas. This adjustment narrows the yield differential with Japan to just one percentage point, insufficient to compensate for the risk of moving capital to the euro during global uncertainty periods. How many yen are in one euro will cease to be a question answerable by simple interest arithmetic: geopolitical factors will prevail.

Base scenario: Wide but downward range

The most probable outcome is a pair confined within a broad band but with a gradual tendency toward yen strengthening. When risk appetite dominates, the euro should hold resistance above 165 ¥. When volatility appears—inflation unexpectedly rising in the U.S., new tariffs, or stock corrections—the yen will regain its safe-haven role and could push the cross toward 158-160 ¥.

The baseline forecast is around 162 ¥ by year-end, with a slight bias toward a stronger yen if the Bank of Japan confirms continuity in its upward cycle during 2026.

Technical Analysis: Signs of Pause After the Rally

The daily chart of EUR/JPY maintains a moderate bullish bias, but indicators warn of fatigue in the momentum. The price trades above its main moving average (approximately 161 ¥), confirming the upward trend since early March. However, recent bars show narrow bodies clustered near the upper edge of Bollinger Bands (max at 164.0 ¥), indicating waning buying energy.

The 14-session RSI retraces from 67 to 56, leaving overbought territory and showing a bearish divergence relative to the May 1 high (164.2 ¥). This pattern typically precedes short-term corrections. Immediate support lies at the Bollinger mean (162.5 ¥); losing it would open the door toward 159.8-160 ¥. On the upside, 164.2 ¥ remains key resistance; a clear close above would enable momentum toward 166-168 ¥.

In summary, the buying tone prevails, but a pullback should be watched as indicators unwind.

Analyst Projections: Convergence in 158-173 ¥ Band

Different forecasting portals offer complementary perspectives:

• LongForecast: 165-173 ¥
• CoinCodex: 166.08-171.94 ¥
• Traders Union: 165.64 ¥ (year-end)
• Bankinter: 160-170 ¥

Although they seem divergent, they respond to different methodologies: some publish specific monthly ranges (December 2025), others present algorithmically detected annual bands. The convergence in the 160-170 ¥ zone suggests a moderate consensus on where the pair should stabilize in terms of how many yen are in one euro.

Practical Strategies: How to Position in EUR/JPY

For Short-Term Horizons (3-6 months)

The pair has been trading within a 160-170 ¥ channel since the start of the year. Each approach to the 165-170 zone presents an opportunity: sell euros and buy yen targeting 162 ¥ with a protective stop at 171 ¥. Days before Bank of Japan decisions often generate oscillations of 1-2 yen; active traders can exploit these with small-sized futures or put-spread options.

For Year-End 2025

Forecasts converge on 160-170 ¥, while more optimistic models point to 170-173 ¥. A prudent tactic: accumulate yen in tranches, buying each time the pair exceeds 163-164 ¥. This averaging reduces the risk of a single entry and lowers the average cost. Those needing euro flow hedging can set forwards or yen deposits near current levels; costs decrease as the interest rate differential narrows.

Profit-taking

If the pair drops to 160-162 ¥ after expected BoJ hikes in summer and autumn, it’s advisable to take at least part of the gains, leaving a defensive position in case geopolitical shocks favor the yen again.

Key Risks to Monitor

An unexpected pause by the Bank of Japan if Japanese inflation unexpectedly declines, a rise in core inflation in Europe that halts ECB rate cuts, or a sustained stock rally that reactivates carry trades could push the pair back toward the upper range.

Additionally, new rounds of tariffs between the U.S. and EU would push the yen 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 Perspective: EUR/JPY Since 1999

Since its establishment over two decades ago, the EUR/JPY pair has witnessed the yen as a refuge during crises and the euro’s volatility amid European challenges. The 2008 financial crisis strengthened the yen, while the eurozone debt crisis of 2010-2012 depreciated the euro. Recent expansive policies by the Bank of Japan favored a gradual euro appreciation.

Today, with the Bank of Japan normalizing and the ECB cutting rates, the pair again reflects the historic tug-of-war between a yen regaining refuge and a euro pressured by slowdown. How many yen are in one euro increasingly depends on geopolitical factors rather than simple yield differentials.

Final Reflection: First Window in Decades

Projections for EUR/JPY by the end of 2025 point to a 158-170 ¥ range, reflecting the definitive cycle change: the Bank of Japan abandons near-zero rates while the ECB cuts rates. The yield gap narrows from two points to barely one, removing the classic carry trade incentive.

Coupled with the yen’s safe-haven status amid trade tensions, the structural bias has shifted in favor of the yen. For the first time in nearly two decades, borrowing in yen to invest in euros is no longer a one-way path. This suggests a downward, albeit gradual, trend for EUR/JPY for the remainder of the year.

With the pair still bouncing between 160 and 170 ¥, it is a good time to build yen positions on rallies toward 165-170 ¥, aiming for 160-162 ¥ as target and maintaining risk controls at 171 ¥. The combination of Japanese normalization, European tightening, and global trade vulnerability creates the clearest opportunity in years to revalue the yen with reasonable expectations and well-defined risk limits.