The safe-haven nature of the yen returns, euro bears eye a break below the 175 mark.

Euro/yen bears are eyeing a break below the 175 mark, with the yen's safe-haven appeal being reactivated accordingly. Analysis notes that France's fiscal and social pressures are exerting sustained pressure on the euro, thereby reinforcing the case for bullish yen; however, short-term uncertainty surrounding Federal Reserve policy and the U.S. midterm elections is casting a shadow over this outlook. The missing link at present is: a hawkish shift by the Bank of Japan at its October 30 meeting. Currently, the euro/yen exchange rate is fluctuating near 176. "The international environment may have turned convincingly bullish for the yen, but for this view to be complete, the Bank of Japan still needs to confirm a more hawkish stance before 2027," FX strategist Audrey Childe-Freeman said in a report. She added that defensive FX positions have regained favor after a recent string of risk-off trading days in the market.