EUR/JPY has fallen over three yen today as sharply curtailed eurozone growth forecasts, the cut in Spain’s credit rating and concerns that German banks have been slow to realize losses on toxic assets combine with aggressive statements over the weekend from North Korea aimed at Seoul spark risk aversion in the cross. When tensions rise on the Korean Peninsula, the JPY often strengthens given its close proximity and its close alliance with the US.
EUR/JPY trades now near 118.50. Support lies at 117.70 and 116.20.