This week, the EUR/JPY pair has been showing a steady recovery from its lowest level seen since September 2024. Today, the pair continues its upward momentum for the third straight session, reaching a weekly high of around 159.67. This bullish impulse is primarily driven by the weakness of the Japanese yen.

Concerns about the potential economic impact of new tariffs imposed by the U.S. President Donald Trump on commodity imports has significantly affected the Japanese yen. As a result, the yen has become less effective as a safe-haven currency compared to its major counterparts. This, combined with general risk-on sentiment in the markets, has outweighed expectations of an interest rate hike by the Bank of Japan, further undermining the yen's strength.

On the other hand, the euro has struggled to attract strong buyers due to rising global trade tensions. Trump's tariffs have effectively disrupted trade deals with the European Union and other nations, creating additional risks for the eurozone economy. German Chancellor Olaf Scholz and French Foreign Minister Jean-Noel Barrot have both stated that the EU will respond to Trump's latest tariff announcement, adding further uncertainty to the market.

The dovish stance of the European Central Bank (ECB) could limit the pair's upward potential. Despite the three-day rally, technical indicators on the daily chart remain in negative territory, suggesting that EUR/JPY lacks strong momentum for further gains at this stage.

With no major economic releases impacting the market today, EUR/JPY remains largely influenced by the yen's movement. While the current recovery is encouraging, technical indicators suggest that the pair may struggle to maintain further gains in the near term.