• EUR/JPY rises to a three-month high of 166.07 on Monday.
• The Japanese Yen received downward pressure as the loss of the LDP coalition increased uncertainty regarding the BoJ rate-hike plans.
• ECB’s Pierre Wunsch said that there is no urgency for the central bank to cut interest rates quickly.

EUR/JPY edges lower around 165.50 during the Asian trading hours on Tuesday, following a three-month high of 166.07 reached on Monday. The Japanese Yen (JPY) has been under pressure due to increasing uncertainty regarding the Bank of Japan's (BoJ) rate-hike plans, particularly after Japan’s Liberal Democratic Party (LDP)-coalition lost its parliamentary majority.

The Bank of Japan’s interest rate decision is set to be the focal point on Thursday, with nearly 86% of economists surveyed by Reuters expecting the central bank to maintain its current rates at the October meeting.

On Tuesday, Japan’s Finance Minister Katsunobu Kato stated that he is “closely watching FX movements, including those driven by speculators, with heightened vigilance,” but refrained from commenting on specific forex levels. Kato emphasized the importance of stable currency movements that reflect economic fundamentals.