EUR/JPY hovers around 168.50 following BoJ’s Summary of Opinions

• EUR/JPY maintains its position as the BoJ’s Summary of Opinions indicated to keep interest rates steady.
• The pair may appreciate due to dampened safe-haven demand following the Israel-Iran ceasefire.
• ECB’s Francois Villeroy de Galhau noted that the central bank may cut interest rates despite the volatile Oil market.

EUR/JPY steadies after registering over 0.50% losses in the previous session, trading around 168.30 during the Asian hours on Wednesday. The Japanese Yen (JPY) moves little against its peers following the release of the Summary of Opinions from the Bank of Japan’s (BoJ) June meeting.

The BoJ’s summary showed that some policymakers called for keeping interest rates steady for the time being due to uncertainty over the impact of US tariffs on Japan’s economy. Many members indicated that the effects of US tariff policies are yet to materialize, and the impact will certainly exert downward pressure on firms’ sentiment.

Latest data showed that Japan’s core inflation climbed to a more than two-year high in May and remained above the central bank’s 2% target. Additionally, the better-than-expected Japan’s PMI keeps the door open for further rate hikes by the BoJ in the coming month.

The risk-sensitive EUR/JPY cross may gain ground due to improved risk appetite, driven by the easing tensions in the Middle East. On Tuesday, US President Donald Trump announced that a ceasefire between Iran and Israel was in place, raising hopes for an end to the 12-day conflict.

However, caution lingered amid uncertainty over the ceasefire’s durability. A US intelligence report indicated that US strikes on Iranian nuclear sites have set back Tehran’s program by only a matter of months, per Reuters. Additionally, Iranian Foreign Minister Abbas Araghchi said that the country’s nuclear program continues, per the local news agency Al Arabiya.

European Central Bank (ECB) policymaker Francois Villeroy de Galhau told the Financial Times on Tuesday that the central bank could still cut interest rates despite the volatility seen in the Oil market. Meanwhile, ECB chief economist Philip Lane said that “Our monetary policy will have to take into account not only the most likely path (the baseline) but also the risks to activity and inflation,” per Reuters.