EUR/JPY declines below 184.50 as geopolitical risks boost Japanese Yen

The EUR/JPY cross loses ground to near 184.20 during the Asian trading hours on Monday. The Japanese Yen (JPY) strengthens against the Euro (EUR) as traders turn to safe-haven currency amid the Iran crisis. 

US President Donald Trump said that he will “avenge” the deaths of three US service members and said the combat operations in Iran will continue. On Monday, Israeli strikes were launched at Beirut's southern suburbs as Hezbollah said it fired rockets and drones toward Israel in retaliation for the death of Iranian Supreme Leader Ali Khamenei. The conflict across the Middle East is heightening traders' anxiety, supporting the Japanese Yen (JPY) and creating a headwind for the cross. 

Additionally, hawkish remarks from Japanese officials might contribute to the JPY’s upside. Bank of Japan (BOJ) Deputy Governor Ryozo Himino said on Monday that while the current policy remains "somewhat accommodative," the central bank should moderately hike rates as long as its economic and price projections are met.

The European Central Bank (ECB) remains cautious due to "perceived inflation" being higher among consumers and potential upward pressures from wage growth. ECB President Christine Lagarde stated that efforts to curb inflation have been "effective" but emphasized that the bank is not pre-committing to any specific rate path.