EURJPY Rallies Above 176 as Yen Weakens: Bulls Eye 178 Amid Political Shifts in Japan

EURJPY gained sharply above 176 on the weak yen. It hit an intraday high of 176.45 and is currently trading at approximately 176.44. Intraday outlook remains bullish as long as support 175 holds.

Sanae Takaichi created history on October 21, 2025, as Japan's first female Prime Minister by winning 237 votes in a commanding parliamentary election in the 465-member Lower House. Her win was guaranteed by a last-minute alliance with the Japan Innovation Party (JIP), accepting reforms like fewer parliamentary seats, free high school education, also a brief suspension of the tax on food intake. Takaichi, the fourth Japanese Prime Minister in five years, leads without a parliamentary majority, following recent political turmoil and the resignation of Shigeru Ishiba. Market reactions were varied; the yen dropped, but the Nikkei climbed to historic highs; her cabinet included Ryosei Akazawa as Economy Minister, and Satsuki Katayama, Finance Minister, was appointed the same evening. Takaichi, a close friend of the late Shinzo Abe, is expected to maintain his predecessor's policies of monetary easing, thereby defining a critical turning point in Japanese and G7 politics.

Technical Analysis:

The EUR/JPY pair is trading above  55 EMA, below  200 and  365-H EMA  on the 1-hour  chart.

• Near-Term Resistance: Around 176.50,a breakout here could lead to targets at 177/178.
   
• Immediate Support: At 175.78, if breached, the pair could fall to 175.20/174.60/174/173.
  
  Indicator Analysis  (1-hour chart):
• CCI (50): Bullish
   
• Average Directional Movement Index:  Bullish
  Overall, the indicators suggest a bullish trend

Trading Recommendation:

It is good to buy on dips around 175.78-80 with a stop loss at 174.80 for a TP of 178.