The euro climbed against the yen during Asian trading on Monday after Japan reported yet another disappointing household spending print, reinforcing expectations that the Bank of Japan (BoJ) will remain firmly dovish. The soft data adds to a growing policy divergence between the Eurozone and Japan, a dynamic that historically benefits risk assets—including cryptocurrencies.
Household spending sinks, yen feels the heat
Japan’s Ministry of Internal Affairs and Communications said household spending contracted 0.4% month-on-month in January, missing forecasts for a 0.3% gain. Year-on-year, the figure slumped 1.8%, far worse than the 0.9% decline anticipated. The release underscores persistent consumer caution in the world’s third-largest economy, despite modest wage hikes and government support measures.
The yen weakened broadly, sending EUR/JPY to 162.45, up 0.3% from the previous close. The pair now hovers just below the record high of ¥188 reached earlier in 2026, with analysts highlighting strong technical resistance near 163.00. Dollar-yen also edged higher, confirming that the move was yen-driven rather than euro-specific.
Policy gap keeps pressure on the yen
The European Central Bank (ECB) is widely expected to hike rates again in June, lifting its main rate to 2.4%, while the BoJ is seen raising its policy rate to a mere 1%. That 1.4-percentage-point gap, combined with Japan’s still-negative real interest rates, makes the yen an unattractive funding currency. Even though Japanese officials have threatened intervention to support the currency—following a suspected action on 30 April—the fundamental picture continues to favour a weaker yen as long as the BoJ stays ultra‑accommodative.
Why crypto traders are paying attention
For the digital asset market, a sustained yen slide carries meaningful implications. Japan has long been one of the world’s most active crypto hubs, and a weak domestic currency often pushes local investors to seek stores of value beyond fiat—historically boosting demand for Bitcoin and Ethereum. With the BoJ unlikely to tighten aggressively amid soft consumption, the yen could remain under pressure, fuelling further interest in crypto as a hedge against yen depreciation. Institutional participants also note that a persistent risk‑on mood in equity indices may spill over into digital assets if the macro backdrop remains supportive.
While direct crypto catalysts are absent from the forex news, the macro tailwind of a diverging ECB and BoJ is a positive signal for Bitcoin and other major cryptocurrency assets.
