The European Central Bank (ECB) raised its key interest rates on Thursday, increasing the deposit rate by a quarter point to 2.50%, the refinancing rate to 2.65%, and the marginal lending facility to 2.90%, effective September 16, according to FX Street.
Following the rate hike, the EUR/JPY currency pair climbed above 179.00 yen, reflecting market anticipation of continued monetary tightening. Reuters via FX Street reported that the ECB is expected to maintain this tightening stance and may raise rates again in October.
For Japanese investors, the ECB’s move and the resulting euro strength against the yen could impact cross-border investments and FX strategies amid a backdrop of contrasting monetary policies between Europe and Japan.